Banks accelerate in the race of electronic payments

23-Oct-2020 Intellasia | Nhip song Kinh te | 6:02 AM Print This Post

The settlement market was slowly changing. Instead of racing to issue cards as before, banks focused on developing international credit card payments and electronic payments to concentrate on daily payment transactions to keep up with the new trend of users and create a safe cashless payment ecosystem for the community.

Competition for card issuance came into quality

According to the latest announcement of the Vietnam Bank Card Association, as of June 30, 2020, the total number of cards in circulation in the market had reached over 100 million cards, including inactive cards. The number of domestic cards accounted for 86%, and international cards accounted for 14%.

A noteworthy development was that even in the first six months of 2020, banks had issued more than 10 million new cards. However, the actual number of cards in circulation in the market at the end of June 2020 had only increased nearly by 1 million cards compared to the end of 2019. This figure showed that the market trend had changed, accordingly, from following the number of cards issued, banks had recently focused on quality. This meant that the issued card must be active, and the cardholder must use the card to spend and pay for the real needs of individuals and their families.

According to Dang Cong Hoan, Acting director of Retail Banking of Vietnam Technological and Commercial Joint-Stock Bank (Techcombank), the most important thing to convince customers to use card services and electronic transactions of banks was to provide customers with a modern payment method and security. Along with that, the bank needed to make a long-term commitment to creating an increasingly sizeable non-cash payment ecosystem. Customers always felt the convenience/usefulness of combined personal payments with safety for the social community.

By implementing the above factors, Hoan said that banks could lead the market in changing people’s behaviour and perceptions in choosing to pay non-cash instead of cash. Banks would contribute to increasing the use of non-cash payment services in the national economy, thereby increasing payment transaction efficiency and transparency in the economy.

Which bank competed for first place in sales of VISA credit cards?

According to the Vietnam Card Association, although the growth rate of card sales in the whole market in the first six months of 2020 had decreased due to the COVID-19 epidemic, the turnover of international card payment still increased well by nearly 22%. In the first six months of this year, many banks still showed profitable growth in attracting more newly issued cards. Competitive positions driving growth included Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), Military Commercial Joint Stock Bank (MBMBBank), Vietnam Prosperity Joint-Stock Commercial Bank (VPBank). Techcombank ranked fourth in the whole market with a total number of newly issued cards more than 600 thousand cards and was at the top of payment volume (excluding cash withdrawal).

However, in terms of international card sales (VISA), it showed a different picture when Techcombank had always been the market leader for three consecutive years. According to the latest updated data, Techcombank’s total Visa card payment volume in the first eight months of this year increased by more than 50 percent over the same period in 2019 and reached more than $2 billion. Techcombank Visa Credit Card was considered an excellent average spending in the market with key products such as Visa Signature, Visa Platinjum Vietnam Airline, and so on.

Besides, Techcombank also stood among the top three in the banking market with the highest rate of demand deposit (CASA) from passengers at more than 30%, grouped with Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and MBB.

To achieve this, many strategic steps had been adopted by Techcombank recently, especially the Zero Fee policy. The bank had been entirely free of charge for online transactions since 2016. Techcombank had also launched an unlimited one percent cashback programme from 2018 in parallel with a cashback programme of up to 1.8 million dong for active payment card transactions. Accordingly, online shopping transactions with a minimum value of 500,000 dong would be refunded at 15%, up to 300,000 dong.

In the year 2020 and the following years, Techcombank would continue to deploy more new product and service solutions, appropriate incentive programmes to meet customers’ maximum needs in the non-cash payment field, best served for daily life consumption purposes. The bank would also continue to launch new segment-based payment products with unique value propositions (CVP) geared towards the basic needs of people’s daily lives and their family, Dang Cong Hoan said.


Category: Finance, Vietnam

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