Vietnam banks eye increased use of card payment services

Vietnam's commercial banks are now prioritising increased profits from card payment services. The domestic market now has 28.5 million bank cards which are mainly used just for cash withdrawals.

"If the issuing of cards continues to spread at its current rate, the market will be awash with idle and useless cards. Banks should focus on developing the quality of their services and extract value from their payment services," said Nguyen Thi Thanh Hang, director of Vietcombank's card centre.

According to the State Bank of Viet Nam, the banking system has 11,000 ATMs, 42,000 merchants and more than 40 card-issuing banks, with over 28.5 million payment cards issued by the end of 2010, compared to 8.3 million cards
with 4,300 ATMs in 2007.

The largest transaction processing systems, Banknetvn, Smartlink and VNBC, have established a network linking 42
member banks with more than 8,000 ATMs.

Banks such as Vietcombank, Eximbank, ACB, Sacombank, Vietinbank, VIB bank, SeABank and PG Bank have implemented a series of programmes to develop and encourage spending by card domestically and abroad.

General Director of PG Bank Nguyen Quang Dinh said that close relationship between banks and retail units provided
good conditions for the development of the payment card market in Viet Nam, and with improved quality, local
customers would further benefit from this convenient banking service.

A survey conducted by Nielsen Co Viet Nam found that up to 23 per cent of customers used debit card services, 1
per cent used credit cards and 100 per cent were aware of ATM cards, but it also showed that the use of ATM cards remained low.

Dinh said consumer habits of using cash and fierce competition between banks required greater efforts to encourage

the use of cards for a wider range of services.