VietinBank is the pioneer in applying new technology and wait in front for the inevitable trend of card payment (Photo: VietnamPlus) Hanoi (VNA) – Though the volume of issued credit cards and payments via credit cards have decreased sharply in Vietnam, VISA and MasterCard have been collecting different fees from a transaction.
Vietnamese banks current have to pay VISA and MasterCard 3-4 types of fees for a transaction. The real situation of “fees overlapping fees” has partly affected card business activities of banks and hindered cashless payments in the country.
The Vietnam Banks Association (VNBA) has recently sent a document to VISA and MasterCard, which account a large market share of the world’s card market, asking them to exempt or reduce fees to support banks in Vietnam.
Foundation to cut fees for customers
In fact, the complex developments of the COVID-19 pandemic have badly affected business activities of banks in Vietnam, including international credit card business.
For the issuance, the use of cards at big banks has continuously dropped since the beginning of the year. By March 2020, the use of credit cards in Vietnam had reduced by 21 percent while the use of credit cards in foreign countries had fallen by 28 percent as compared to the same period last year.
With regard to the payment, the payment volume through credit cards has dropped sharply month on month, especially in the first week of April. The average amount of payment has decreased by 78 percent from the same period in 2019 and plunged by up to 93 percent against March 2020.
A representative of the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) said amid the complicated developments of the COVID-19 pandemic, the bank has exempted or slashed fees for payments via credit cards for customers since the beginning of the year.
Specifically, VietinBank coordinated with the National Payment Corporation of Vietnam (NAPAS) to exempt and lower fees for transfers via iPay. However, due to the impact of the COVID-19 pandemic, especially during the social distancing period, customers’ shopping demands and spending are limited so the volume of money paid via credit cards dropped strongly.
Though the issuance and payments via credit cards have decreased sharply, VISA and MasterCard have been applying a complicated fee collecting mechanism and collecting many types of fees from a transaction, such as licensing fee, payment fee, branding fee, spending fee in/outside Vietnam and service charge.
In that context, VBA member banks proposed VISA and MasterCard issue solutions and policies to cut fees for Vietnamese banks (applied for at least 12 months). In the long term, they need to have suitable policies to help the Vietnamese card market develop more stably and effectively.
Focusing on develop card technology
International credit cards of VISA and MasterCard now account for more than 70 percent of the total number. Therefore, if VISA and MasterCard exempt or cut card-related fees, banks are enabled to slash fees for card payment accepting units, thus pushing cashless payments in Vietnam.
In order to encourage customers to use credit cards in shopping, it is necessary to focus on developing card technology, enabling customers to enjoy the best experiences.
In Vietnam, VietinBank is the pioneer in applying new technology and wait in front for the inevitable trend of card payment. In May 2012, VietinBank officially issued international credit cards EMV Cremium.
To enhance security for online payment transactions of international card holders, the bank officially launched 3D Secure feature for VISA cards in September 2018. With its high security level, 3D Secure helps card holders feel secure when conducting transactions, protect their interests and restrict risks such as personal information theft and using counterfeit cards.
VietinBank is also one of the first seven banks in Vietnam that have shifted from magnetic cards to chip cards. The move aims to strengthen security and safety and accelerate payment speed for card holders. Chip cards could also limit card skimming and other risks.
Besides, VietinBank also developed different cards that are suitable to different segments of customers such as VISA Signature, JCB Ultimate and MasterCard Platinum./.
