No bank charges for switching to chip cards
Many commercial banks will not charge fees if customers switch from magnetic-stripe cards to chip cards during the initial roll-out period to support the conversion plan, sources from banks have said.
Seven banks, which have issued a combined 70% of the cards in the country, introduced their domestic chip cards in late May. They are eligible to issue these cards using Europay, MasterCard and Visa (EMV) chip technology, which optimizes the security of card information and enables contactless payment.
These banks are Bank for Foreign Trade of Vietnam, Vietnam Bank for Industry and Trade (VietinBank), Bank for Investment and Development of Vietnam, Vietnam Bank for Agriculture and Rural Development, Saigon Thuong Tin Commercial Bank, Tien Phong Bank and An Binh Commercial Bank (ABBank).
ABBank aims to complete the card conversion by late 2020, ahead of the December 2021 deadline set by the State Bank of Vietnam. The commercial bank expects some 30% of its clients to replace their cards by the end of this year.
VietinBank is also helping its clients to exchange their magnetic automated teller machine (ATM) cards for chip ATM cards. The new cards will be integrated on the smart phone platform, making it easier to conduct contactless payments. Card users only need to bring their phones closer to the point of sale (POS) terminals to complete their transactions.
The card change is aimed at improving security, safety and payment speed as well as reducing the risk of skimmer fraud, according to VietinBank.
Card skimming is a type of theft that utilizes a small device to steal credit card information. The thieves then sell or use this card data to make fraudulent purchases.
To complete card conversions in line with the Vietnam Chip Card Specifications (VCCS), local issuing banks have to invest heavily in upgrading their card management, card personalization and ATM/POS systems.
The VCCS uses contactless technology and can make payments through Quick Response codes in line with EMV specifications.
ABBank noted that it will not raise fees when its cardholders apply for a domestic debit card, called the ABBANK YouCard, over the short term. Some other banks will also eliminate fees for card switches during the initial phase.
Data from the National Payment Corporation of Vietnam showed that 48 banks have so far issued some 76 million domestic cards and have over 260,000 POS terminals and 18,600 ATMs.
Local commercial banks have to convert at least 30% of their magnetic-stripe ATM cards, 35% of ATMs and 50% of POS terminals to contact and contactless chip-based technology by the end of this year. They have to replace all of their cards by late 2021, according to the plan of the central bank.