Eight banks connect POS network

Two young women withdraw cash at an ATM operated by Vietcombank. Cardholders now find non-cash payments easier as Vietcombank and seven other lenders on Tuesday had their networks connected to points of sale outlets - Photo: Kinh Luan

HANOI –Eight banks on Tuesday started connecting their networks to points of sale outlets accepting local debit cards (POS), creating more convenience for card holders.

The eight banks are Vietcombank, Agribank, Vietinbank, BIDV, Techcombank, VIB, SeABank, and OceanBank.

Card holders of any one of eight banks can use their cards to pay at all the banks’ POS outlets. That will help banks to save costs and widening POS network and reduce pressure on the ATM system, said a statement from State Bank of Vietnam.

POS machines can be found at supermarket checkouts, trade centers, restaurants, hotels, taxis, and hospitals. The connection aims to carry out Vietnam’s target of reducing cash usage in the economy.

The POS connection is the first phase of the Government’s program strengthening payment without cash. Other banks such as Maritime Bank, Eximbank and Saigon Bank for Industry and Trade will join the network in the near future.

According to the State Bank of Vietnam, there are about 27 million card holders, 11,000 ATMs, and 42,000 POS machines nationwide. During 2006-2010, card holders grew by 150% to 200% per year but deposits by cards account for less than 5% of card transactions. Withdrawing cash via ATM accounts for 80% of total card transactions.

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Credit card growth sluggish despite incentives

Many banks in Vietnam have tied up with electronics stores, supermarkets, restaurants, spas, and others to offer discounts to card users

High interest rates, annual fees and safety considerations have prevented the credit card industry from getting off to a roaring start in Vietnam.

Although both domestic and foreign banks have launched several promotion programmes, they still have failed to attract enough customers to use credit cards for their shopping and other needs.

Because they expect the market to be a lucrative one in the future, the banks are pushing the use of cards so as to acquire and expand their market share.

The promotion campaigns have included direct marketing and the granting of credit cards without any fees.

Ho Anh Ngoc, head of retail banking in the southern region for Techcombank, said his bank plans to increase the number of its credit card users to 23,000 by the end of this year. It is targeting customers from all income segments.

Other banks such as Vietcombank, Eximbank, Asia Commercial Bank have launched their own promotions to expand the use of credit cards.

Customers travelling to Singapore between August 27 and September 30, can get a set of X-mini Capsule speakers from Eximbank if they spend at least $500 using their Visa card over three days.

Phi Thi Phuong, head of Eximbank's card management department said since early this year, Eximbank has issued 4,000 credit cards, increasing the total number of customers to 30,000.

To attract more customers, international banks like HSBC and ANZ have sought to increase their market share by marketing on websites and through emails and phone calls to customers.

The banks have also linked up with trade centres and supermarkets to offer discounts for those using Visa or MasterCard for their shopping.

Hoang Long, who works for a transportation company in District 3, said he received an invitation to open a credit card from ANZ, but failed to get one because his monthly salary was less than VND5 million (US$256).

Furthermore, late payments on a Visa card attract very high interest rates of between 1.5 percent to 1.9 percent per month, and this is something that gives pause for thought to Vietnamese clients.

HSBC and Techcombank levy overdue fees of 1.87 percent and 1.6 percent per month respectively.

Card owners also have to pay other kinds of fees.

Nguyen Tu Anh, director of Smartlink Card Joint Stock Co, said customers have to pay considerable attention to opening fees, annual costs, loan rates and exchange rates for international payments.

Hai Duyen, a regular customer of Techcombank, said credit cards were not all as safe as presumed. Recently, she had her pocket picked, and lost VND20 million ($1,025) through her visa card.

According to Duyen, credit cards do not require any password like the ATM card. Thieves can use a forged signature.

Moreover, Vietnamese customers are still not used to using cards for their shopping, and prefer to use cash instead.

Also, many shopping centres are yet to install POS machines to accept credit card payments.

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Credit card growth sluggish despite incentives

High interest rates, annual fees and safety considerations have
prevented the credit card industry from getting off to a roaring start
in Vietnam.

Although both domestic and foreign
banks have launched several promotion programmes, they still have failed
to attract enough customers to use credit cards for their shopping and
other needs.

Because they expect the market to be a
lucrative one in the future, the banks are pushing the use of cards so
as to acquire and expand their market share.

The promotion campaigns have included direct marketing and the granting of credit cards without any fees.

Ho Anh Ngoc, head of retail banking in the southern region for
Techcombank, said his bank plans to increase the number of its credit
card users to 23,000 by the end of this year. It is targeting customers
from all income segments.

Other banks such as
Vietcombank, Eximbank, Asia Commercial Bank have launched their own
promotions to expand the use of credit cards.

Customers travelling to Singapore between August 27 and September
30, can get a set of X-mini Capsule speakers from Eximbank if they spend
at least 500 USD using their Visa card over three days.

Phi Thi Phuong, head of Eximbank's card management department said
since early this year, Eximbank has issued 4,000 credit cards,
increasing the total number of customers to 30,000.

To attract
more customers, international banks like HSBC and ANZ have sought to
increase their market share by marketing on websites and through emails
and phone calls to customers.

The banks have also
linked up with trade centres and supermarkets to offer discounts for
those using Visa or MasterCard for their shopping.

Hoang Long, who works for a transportation company in District 3, said
he received an invitation to open a credit card from ANZ, but failed to
get one because his monthly salary was less than 5 million VND (256
USD).

Furthermore, late payments on a Visa card
attract very high interest rates of between 1.5 percent to 1.9 percent
per month, and this is something that gives pause for thought to
Vietnamese clients.

HSBC and Techcombank levy overdue fees of 1.87 percent and 1.6 percent per month respectively.

Card owners also have to pay other kinds of fees.

Nguyen Tu Anh, director of Smartlink Card Joint Stock Co, said
customers have to pay considerable attention to opening fees, annual
costs, loan rates and exchange rates for international payments.

Hai Duyen, a regular customer of Techcombank, said credit cards were
not all as safe as presumed. Recently, she had her pocket picked, and
lost 20 million VND (1,025 USD) through her visa card.

According to Duyen, credit cards do not require any password like the ATM card. Thieves can use a forged signature.

Moreover, Vietnamese customers are still not used to using cards for their shopping, and prefer to use cash instead.

Also, many shopping centres are yet to install POS machines to accept credit card payments./.

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Techcombank launches internet credit card

A customer uses a Techcombank card to withdraw money at an ATM of the bank. Techcombank has issued the virtual card called Rêv Visa Internet Card - Photo: Courtesy of Techcombank

HCMC – Technological and Commercial Bank of Vietnam, or Techcombank, has combined with Rêv Asia Pacific Co. to launch a virtual card called Rêv Visa Internet Card that allows customers to buy goods via the internet.

Rêv Visa Internet Card is a pre-paid card and does not require the holder to have a bank account.

A customer just needs to buy a scratch card with the desired amount of money, then goes to the website www.revinternetcard.com.vn to activate the card. He or she then can use that account to buy goods on local and international websites accepting payment by Visa card.

In HCMC, customers can buy the card at Coop Mart supermarkets on Nguyen Dinh Chieu, Nguyen Kiem, and Dien Bien Phu Street or Sinh Telecom Co. in District 10. The bank, which is the first bank to launch this virtual card in Vietnam, said these cards would be widely distributed in the near future.

Techcombank now issues many kinds of payment cards comprising local debit card, Visa debit card, Visa credit card, and a card under cooperation between the bank and Vietnam Airlines.

As of late June this year, Techcombank’s total assets had amounted to VND107.9 trillion. At this time, Techcombank has nearly 230 branches and transaction offices nationwide and plans to raise the number to 300 by the end of this year.

HSBC, holding a 20% stake in Techcombank, is now the strategic investor of the local institution.

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Vietnamese prefer cash to plastic, banks discover

Many banks in Vietnam have tied up with electronics stores, supermarkets, restaurants, spas, and others to offer discounts to card users

Credit and other cards may have come a long way from the high transaction and other fees of the past, with banks now even offering discounts and freebies to attract customers, but they still face hurdles in popularizing the cards.

Many banks have tied up with electronics stores, supermarkets, restaurants, spas, and others to offer discounts to card users.

Sacombank clients, for instance, get 5-30 percent discounts at 200 restaurants, coffee shops, and malls in Hanoi and Ho Chi Minh City. These promotions have helped the bank to increase transactions by 30 percent since the end of last year.

Trinh Thuong Thuc, director of card services at Vietcombank in HCMC, said from September holders of American Express card will get reward points based on their transactions at more than 200 Amex points of sale. In the beginning, the reward will be 0.1 percent of transaction value and can be obtained in cash or kind.

Le Tri Thong, vice president of East Asia Bank, said increasing card transactions will decrease the use of cash, enabling banks to cut ATM and other costs.

But many banks have failed to advertise these promotions. VD, a card holder, said his bank did not inform him even about its largest ever promotion recently. Many card holders learn about promotions at restaurants and shops, and are often caught without their cards when they learn about them.

Banks claim their advertising is limited by budget constraints.

Another factor that limits the effectiveness of promotions is that only international cards like Visa and Mastercard come with the freebies while 90 percent of all cards issued in Vietnam are domestic ATM and debit cards.

A director of a card services company explained that this is because banks receive funding for promotions from international card companies, and if they want to expand the discounts to their own ATM and debit cards, they have to pay themselves.

Le Thi Thong of East Asia Bank said increasing domestic card transactions can actually be more beneficial since merchants have to pay 3 to 3.5 percent of a transaction to banks compared to just 1 percent or less in case of domestic cards.

The banks also have to spend money on installing card readers at merchants’ establishments and other infrastructure though a large chunk of the transaction fees, known as interchange fees, they collect goes to international card companies.

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