Commercial banks will issue ATM cards made of chip technology instead of magnetic cards. So, the card conversion cost up to thousands of billion, customers or banks will bear?
Vietnam National Payment Joint Stock Company (Napas) along with 7 banks namely Vietcombank, BIDV, Agribank, VietinBank, Sacombank, ABBank and TPBank have started converting cards from ATM to chip cards. According to SBV Deputy Governor Nguyen Kim Anh, the conversion of magnetic cards to chip cards is an indispensable trend of countries in the region and the world, especially in the context of increasing technology crimes and focusing on The market has not applied chip card technology.
Currently, Vietnam has 48 domestic card issuers with about 76 million cards, more than 261,000 POS and 18,600 ATMs; In particular, most POS has followed the EMV Standard, so deploying local chip cards on devices that accept cards will not be too complicated.
According to the plan, by the end of 2019, commercial banks will convert at least 30% of the number of domestic cards, 35% of the number of ATMs and 50% of the number of POS in the market to ensure compliance with standards and at the latest. By the end of 2021, all domestic cards will be converted into chip cards.
Nguyen Tu Anh, Napas President, said that in order to support banks in the conversion process, aiming to convert domestic chip cards according to the SBV’s schedule, Napas has implemented a service fee reduction policy. switch up to 80% (depending on the type of transaction) for banks to complete the technical conditions to convert a magnetic card to the domestic chip card standard from May 1, 2019.
Many people want to change their current ATM card to chip card for added security. However, many customers are still worried because they do not know if they have to pay additional fees when coming to the bank to convert their current card from ATM to chip card.
This concern of many people stems from the current fact, the cost to make a chip embryo is 2-3 USD, 7-8 times higher than a magnetic card. If each chip card billet is about 2 USD (approximately 46,000 VND), multiplied by the number of chip cards that need to be converted this year about 22 million cards, the amount that banks need to spend on conversion is over 1,000 billions dong. In addition, banks also have to upgrade both POS terminals and ATMs to accommodate card conversion and many other expenses.
Vietnam Bank Card Association and leaders of the first seven banks to issue and pay domestic chip cards pledged to continue their efforts to complete the conversion of domestic chip cards according to the schedule set by the State Bank. The conversion of magnetic card to local chip card will not affect customers’ transactions.
However, the cost of conversion is also a problem for banks, especially for banks with a large number of cards but banks will basically apply the special conversion fee incentives. For existing cardholders, consider collecting new card issuance fees from time to time. Banks will notify customers of new card issuance time, new card registration process and procedures as well as related policies (if any) according to the provisions of law.
According to Nguyen Tu Anh, Napas is studying cooperation with international card organizations to co-issue with co-banks in Vietnam the market of co-badge cards between domestic chip cards and chip cards. internationally, allowing customers to own this card for convenient use both domestically and abroad.
(Source: Vietnamnet)
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