Vietnamese banks are about to simultaneously launch domestic credit cards

23-Jan-2021 Intellasia | Doanh nghiep va Tiep thi | 6:02 AM Print This Post

According to the Vietnam Bank Card Association, from 2017 to 2020, the total number of domestic credit cards issued by banks (not complying with the State Bank of Vietnam SBV’s Domestic Chip Card Base Standard) grew negative by 10%. in terms of number of cards in circulation (decreased active cards, increased “hibernation” cards) and negative 36 percent growth in new issues. Total sales using domestic credit cards grew by 25%. In which, total revenue from card payment increased by 132%, total revenue from cash withdrawal by domestic credit card at ATM increased negative by 1%. The above figures also show the correct direction of SBV in reducing cash withdrawal at ATMs and increasing payment transactions.

Currently, international card organisations such as Master Card, Visa, JCB… are accounting for most of the market, while domestic credit cards are very few. At this point, domestic banks have just started to issue domestic credit cards more widely and simultaneously.

Specifically, according to Nguyen Quang Minh, deputy general director of Vietnam National Payment Joint Stock Company (Napas), in January this year, 6 banks including ACB, Viet Capital Bank, VietinBank, Sacombank, BaoVietBank and HDBank officially launching domestic credit cards and domestic prepaid cards. From now on, customers can issue credit cards at the above Napas member banks and organisations.

In the near future (in 2021), Vietcombank, BIDV, Agribank, VPBank and other financial companies such as FE Credit, Vietcredit, FCCOM, etc… will also issue domestic credit cards according to VCCS Standard (standard issued by SBV, complies with/ inherits the international standard EMV) to serve the needs of customers.

It is known that domestic credit cards will target middle and low income customers and provide tools of consumer spending based on credit. Another important purpose is to expand the accessibility of credit card products to a segment of customers with lower income, provide a source of consumer money from unsecured, repel black credit.

An important point of domestic credit cards compared to international credit cards is the more preferential fees. There is no fee charged by the cardholder when making payments (except for withdrawals) from the credit card. For payment transactions, transaction fees will be between 1.1 percent 1.3 percent of the transaction value, lower than the other card brands. The 1.1 percent 1.3 percent fee includes 0.6 percent 0.8 percent of the interchange fee paid to the issuing bank, the rest is paid to the Accepting Bank and the Card Switching Organisation. Meanwhile, the card switching organisation (NAPAS) collects 0.05 percent of the transaction value.

For cash withdrawal transactions, the expected fee is 1-2 percent of the transaction value (the minimum fee is from 10,000 20,000 dong, also much lower than the fee of about 4 percent of the transaction value or the minimum 50,000 dong of other cards currently.


Category: Finance, Vietnam

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