A hand holding bank cards of different banks (Photo: VNA) Nguyen Ngoc Hien, editor-in-chief of Lao Dong newspaper, underlined DCCs as aninstrument for promoting cashless payments in the country.
DCCs allow holders to borrow loans to cover personal expenses and pay the loansoff later with up to 55 days interest-free.
That means people can use DCCs to take out short-term loans with low-interestrates rather than turn to loan sharks for money, effectively curbing usury.
“Vietnam is such a potential market for DCCs with its population of nearly 100million,” claimed the editor-in-chief.
Le Van Tuyen, deputy director of Payment Department under the State Bank ofVietnam, revealed that by late 2021 there were 12 DCC-issuers in Vietnam with atotal of 475,000 active cards.
DCCs have become popular among many urban citizens, but not so among peopleliving in rural areas who have stable incomes and want convenient payments fortheir daily spending.
Accordingly, there is still plenty of room for growth in the rural segment.
The deputy director also mentioned several conveniences of DCCs that enabledthem to gain popularity among first-time users.
These include a simple process, long interest-free duration, low transactionfees and compatibility with the issuers’ existing debit payment networks.
To Dinh Ton, deputy general director of Vietnam Bank for Agriculture and RuralDevelopment (Agribank), revealed that the bank had inaugurated its own DCCnamed Loc Viet in early 2022.
Loc Viet is a state-of-the-art duo card that combines debit and creditfeatures. It offers unsecured loans to its holders to a credit limit of 30million VND (1,311 USD) with a grace period of 55 days.
Agribank has been offering free points of sale (POS) devices with notransaction fees to promote the use of Loc Viet in rural areas.
“So far, 430,000 cards have been issued,a total overdraft of 2.5 trillion VND (109.3 million USD) has been granted, andover 5,000 new POS devices have been set up, raising the total number of POSdevices to 15,000 in rural areas,” he said.
Ton believes that a client base of nearly 27 million families would give thebank a considerable advantage, allowing it to promote cashless payments in thecountry further.
Tran Thi An Dung, Hanoi branch manager of Asia Commercial Joint Stock Bank(ACB), said that the bank’s DCC had been in use for five years and enjoyed anannual growth rate of about 80 percent between 2017 and 2021.
She put the fast growth rate of the DCC down to its various facilities.
Notably, cardholders can pay in installments for the goods and services of over200 ACB’s partners without incurring any interest and fees.
For other goods and services, payments are interest-free and with small fees.
As ACB and NAPAS are cooperating to step up the growth of DCCs in the next 3-5years, the manager urged NAPAS to revise its intercharge fees to reach out tomore clients.
Nguyen Quang Minh, deputy general director of National Payment Services(NAPAS), revealed that the organisation had introduced its DCCs (NAPAS Credit)in January 2021.
NAPAS Credits are accepted by more than 300,000 payment terminals ande-commerce platforms nationwide and can be used to withdraw cash at over 20,000ATMs.
So far, banks that have issued NAPAS DCCs include Agribank, ACB, VietinBankHDBank and Sacombank.
According to Minh, there were just 6.5 million credit cards in Vietnam as oflate June 2021.
This figure pales in comparison with the country’s population of nearly 100million, meaning a bright prospect of growth for DCCs.
He expects more banks to get in on the act in the near future, making DCCs anorm in domestic payments.
Pham Tien Dung, deputy governor of the State Bank of Vietnam, asserted thatclients would never go back to cash once they got used to cashless payments.
However, convincing cash-preferred clients to try cashless payments for thefirst time is not an easy task.
Accordingly, the deputy governor recommended DCC issuers must effectivelycommunicate with their clients to keep them well-informed about theconveniences and facilities of DCCs.
He suggested incorporating payment terminals into all industries in the economyto expand the card acceptance network.
He also called for the widespread use of cashless payments and DCCs in ruralareas to help the disadvantaged get access to financial services.
Lastly, the deputy governor requested DCC issuers and NAPAS to ensure thesecurity and safety of the card system and safeguard the rights and interestsof cardholders./.
VNA
