Vietnam retailers collect surcharges for card payment despite hefty fines

Vietnam retailers collect surcharges for card payment despite hefty fines

Many retailers in Ho Chi Minh City still defy the ban on collecting surcharges from customers who use credit and debit cards, saying they need the premium to pay back to the banks that offer the point of sales (POS) services.

In Vietnam, retailers are strictly prohibited from levying surcharges on card payments by the State Bank of Vietnam and face fines ranging from VND30 million to VND50 million (US$1,415-2,358) for doing so.

Despite the laws, asking customers to pay extra fees for their card payments is not uncommon at some shopping malls and stores across HCMC, the country’s southern economic hub.

“We have to pay POS service fees for banks, and thus have no choice but to charge customers for the premium to cover this cost,” an attendant at an electronics store inside the Tax shopping mall in District 1 explained.

There are two POS machines provided by state-owned lenders Agribank and Vietcombank at the venue, and payments are subject to a two percent surcharge.

POS is a kind of equipment via which a customer can use a credit card issued by a bank to make a payment to the merchant in exchange for goods or services.

“An iPhone 5S is available at only VND14.5 million ($684), but when the three percent surcharge is counted, it is nearly VND15 million,” Minh Dung, based in District 3, complained after he learned of the payment regulation at a mobile phone shop on Le Van Sy Street in Tan Binh District.

The shop attendants also explained that they have to collect the extra fees as per bank regulation.

Banks will normally charge the retailers that use their POS services two percent of their revenues generated from card payments.

“The fees can be somewhere from 1.6 percent to 1.8 percent in some cases, and these are the lowest rates possible,” commented Tu Tien Phat, director of individual customer service of private lender ACB.

But some card-accepting retailers say these rates are too high, which is the main reason for them to add surcharges.

“If banks lower the fees, no retailers will charge customers for the extra expenses,” they said.

A top official from a joint stock bank said the two percent fee for installing POS machines at retailing venues is mandatory and is in accordance with international practice.

He asserted that retailers cannot incur losses with such a low rate as their profit can be as high as 10 percent.

Besides the hefty fine stipulated by the central bank, VietinBank will cancel contracts with the retailers and remove their POS machines if they are found violating the ban, its CEO Le Duc Tho told Tuoi Tre.

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