A common timetable for the replacement of magnetic cards with chip cards is being considered by the State Bank of Vietnam.

Under the plan, chip cards with the EMV standard, which is already used by the world’s largest card alliances of Europay, Master Card and Visa, would be applied to international payment cards while domestic payment chip cards would w2ork to a standard suitable for Vietnam.

Statistics to June indicate there were 8,800 ATMs and 28,300 POS (points of sale) in Vietnam. The more than 17 million cards on issue had 176 brand names issued by 41 payment service companies.

Most ATM cards used in Vietnam have magnetic security technology and only a small number of banks use chip security technology.

The State Bank said chip security technology was used in most developed countries as chip cards or smart cards with embedded microchips. There allowed banks to expand the services they offered and provide better security options.

With these advantages, the world’s main card alliances have recommended all countries use chip cards, especially as card fraud was rising rapidly.

Card fraud in Vietnam is about 0.15 percent of the country’s total card payments, about a quarter of the world average.

It was becoming a serious problem in regional economies such as Malaysia and Thailand . Due to the increasing fraud, Malaysia , Japan and Taiwan have recently replaced all magnetic cards with chip cards and Thailand was expected to shortly complete replacement.

International experts have told Vietnam that without a preventive plan, the country could become a destination for international card criminals.

Domestic banks said it was difficult to synchronise a massive replacement due to high costs and time and that as well as replacing cards, they would also have to upgrade computer networks and payment portals to make them compatible with the new technology.

Nguyen Thu Ha, chairman of Bank Card Association, said if chip cards were used in Vietnam, the financial switching system would also need to be upgraded to ATMs’ could “talk” to each other.

Industry insiders estimated a new ATM would cost tens of thousands of dollars, and a POS machine about 100 USD. A magnetic strip costs a bank 0.2 USD, about a fifth of the chip outlay.

Banknetvn general director Ngo Ngoc Dong said the replacement of magnetic cards with chip cards would need a detailed itinerary as simultaneous replacement would be difficult and not all banks could do it.

Dong said it would be better to approach replacement on a smaller scale. He estimated it would take the country up to three years to complete the replacement./.