Vietnam urges banks to switch to chip cards for better security
Vietnam urges banks to switch to chip cards for better security
The State Bank of Vietnam has urged local banks to switch from magnetic-stripe to chip-based cards to ensure better security for holders and counter the alarming rise in card fraud.
Banks should also adopt advanced security solutions for their card payment systems to mitigate possible risks and losses in transactions, the SBV, the country’s central bank, said in a recent fiat.
A magnetic stripe card, or swipe card, bears a band of magnetic material on its surface, while plastic with a small silver or gold metallic square visible on its front is known as chip card.
While the announcement itself did not elaborate why swipe cards should be replaced with chip cards, the latter is generally known to ensure more secured transactions.
It is more difficult to clone a chip card than a magnetic stripe plastic and the information encryption in the chip is more sophisticated and safer than that in the magnetic band, leading to more secure transactions.
Using fraudulent cards for payment and AMT withdrawal is not uncommon in Vietnam, with many of the violations committed by foreigners in large cities such as Hanoi and Ho Chi Minh City, according to the central bank.
