Local cardholders still use cards for cash withdrawal

14:33 | 31/01/2012
Though the Vietnamese payment card industry has posted impressive growth over the last 20 years, most local cardholders still use the cards for cash withdrawal, rather than conducting their payments with them.


A huge number of workers in the industrial parks and processing-exporting zones in Ho Chi Minh City, Dong Nai and Binh Duong provinces are now receiving wages via ATM cards, but none of them have ever used the plastics for purposes other than drawing cash.

Minh Tuyen, a resident in Ho Chi Minh City’s Thu Duc District, told Nguoi Lao Dong newspaper that she has never used card payment or any value-added services provided by the bank via the plastics, although her salary is paid directly to her bank account.

Hence, long lines of workers queuing in front of ATM booths on salary-payment day have become commonplace, and technical problems such as the machines running out of cash, or becoming inoperable are inevitable.

In 2006, the domestic card payment market consisted of only 5 millions plastics, 3,000 ATMs, and around 11,000 points of sale (POS). By the end of last year, the number of cards rose drastically to 40 million, while the respective figures for ATMs and POSs are 13,000 and 7,000.

Nearly 50 credit institutions countrywide are also offering more than 200 different brands of ATM cards.

“The growth of bank cards is the most impressive out of the non-cash payment sectors,” said Duong Hong Phuong, deputy head of the State Bank of Vietnam’s Payment Agency.

Along with the growth of payment plastics, many banks also offer more services that can be paid via ATM cards such as clearing power, water, and telephone bills, or paying school fees.

“Boosting non-cash payment will not only help reduce the amount of cash circulating in the economy, but also facilitate the central bank’s monetary policy,” said Vu Viet Ngoan, chairman of the Committee for National Financial Supervision.

However, with local cardholders sticking to the habit of paying via cash, payments recorded via plastics still post low growth.

According to the Vietnam Bank Card Association, more than 83.2 per cent of transactions via ATM cards in 2010 were cash withdrawals, while only 0.5 per cent were card payments.

Inadequate infrastructure

Besides the habit of using cash, the unsynchronized infrastructure is also one of the reasons behind the modest use of card payment.

In major restaurants and supermarkets around HCMC, the POS only accept credit cards, rather than ATM cards; while discounts or promotional programs are also subject to payment via credit cards only.

Meanwhile, some international hotels only equip POS for international credit cards, rather than for local ATM plastics.

Nguyen Van Dung, deputy director of the central bank’s branch in HCMC, said payment via POS can help banks save expenses in expanding the ATM networks, while reducing workload for the machines.

However, Dung added, the largest obstacle for card payment is the banks’ inadequate investment in relevant technologies for the infrastructure.

Statistics show that the rate of unsuccessful transactions via POS of Banknetvn is 29 per cent, while the respective figures for Smartlink and VNBC are 20 per cent, and 19 per cent.


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