Business

Banks to stop issuing magnetic strip cards in three months

Vietnamese banks will only be allowed to issue chip cards from March 31, 2021, according to a State Bank of Vietnam (SBV) draft circular.
Banks to stop issuing magnetic strip cards in three months ảnh 1Illustrative photo. (Source: VNA)

Hanoi (VNA) – Vietnamese banks will only beallowed to issue chip cards from March 31, 2021, according to a State Bank ofVietnam (SBV) draft circular.

Currently, local banks issue both chip and magnetic stripcards.

The draft regulation aims to help meet the country’sapproved roadmap of replacing all current magnetic strip cards with chip cardsby December 31, 2021. The chip cards are compatible with EMV standards as wellas the standards of international card organisations such as Visa, MasterCard,JCB and UnionPay.

International card-issuing organisations have askedVietnamese banks to switch to chip cards that meet EMV standards to increasesafety amidst a growing number of information thefts. Security experts havealso warned Vietnam’s delayed transition to chip technology could put thecountry at risk of becoming a haven for card criminals from around the world asit is among the dwindling number of countries where magnetic swipe cards arestill prevalent.

Commercial banks are in the process of switching over to thenew cards because of their stronger security features. However, some banks saythe switch faces multiple barriers. They will have to upgrade their technologyand replace ATMs and POS terminals with newer ones compatible with chip cards.

Another major challenge is that many users have beenreluctant to have their cards replaced by chip-based ones though many noticeshave been issued by the bank regarding this issue.

As of the end of the third quarter of 2020, Vietnam had about 93.78million bank cards in circulation, with the majority magnetic strip cards withweak security features and easily hacked.

According to the SBV’s roadmap, 100 percent of bank cardswill be chip-based and 100 percent of ATMs and POS terminals will be altered toaccept chip cards by the end of 2021.

Besides ensuring greater payment security, the replacementis also among the central bank’s plans to promote non-cash payment methods.Under the Government’s strategy, by the end of 2025, at least 80 percent ofadults in Vietnam are hoped to have bank accounts and the number of non-cashtransactions will expand by 20-25 percent annually./.
VNA
#chip cards #ATM cards #magnetic strip cards #security features #information thefts #banking #Vietnam #Vietnam news #Vietnam News Agency #Vietnamplus
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