It is difficult for Vietnamese banks to reduce international card fees

Vietnamese banks are proposing international card issuers such as Visa, MasterCard to reduce card fees when revenue from this activity plummets due to the impact of epidemics, but the possibility of fee reduction is not high.
The Vietnam Banking Association (VNBA) said that the Covid-19 pandemic was complicated and greatly affected the business activities of banks in Vietnam, including card activities.

Specifically, as of March 2020, sales of domestic cards decreased by 21%, sales of cards using abroad decreased by 28% compared to the same period of 2019.

Similarly, the payment segment when card payment sales plummeted over the months, especially in the first week of April, the average decrease of 78% over the same period and 93% compared to March.

“At some merchants accepting cards such as aviation, education, travel, hotels, the average payment volume of domestic and foreign cards in March 2020 decreased by 80% compared to the previous month and expected. Ants continue to fall sharply in April and the coming months, ”said Mr. Nguyen Toan Thang, VNBA General Secretary.

Talking to the Securities Investment Review, the director of a joint-stock commercial bank said that in fact, in a card transaction, Visa and MasterCard are collecting 3-4 overlapping fees and this situation takes place. for many years.

For example, for cards issued by banks outside Vietnam, fees are collected on sales. Specifically, for Visa, the fee collected on other sales is 0.2% (after tax of 0.235%), including service fee, system upgrade is 0.1% (after tax is 0.1115%), merchant fee the difference is 0.1% (after tax is 0.12%); also at MasterCard is service fee, system upgrade 0.02% (after tax 0.023%).

Fees collected on sales of cross-border transactions compared with fees on sales of transactions in Vietnam, Mastercard 30-70 times higher, Visa 10-30 times higher.

“That’s not to mention for the licensed but not approved transactions, the bank cannot collect fees from the card accepting unit (the transaction is not paid by the cardholder), but still has to pay the card organization. international, ”said the card director.

In addition, the exchange rate (interchange) of credit institutions is high, so the payment banks receivable of the accepting units are high.

Fees for interchange of banks issuing in Vietnam are charged by units accepting POS cards from 0.2-0.3%, for units accepting online cards from 1.15-1.5%.

Bank fees payable in Vietnam must be paid by POS units and online from 1-1.97% depending on the card class.

Under the impact of Covid-19, the decline in payment sales led to the fact that the payment banks were unable to cover the expenses, but continued to bear the costs of investing, maintaining and operating the payment systems, paying the interchange fee. very high for banks to issue along with other fees for international card organizations.

Facing this fact, VNBA proposed exemption and reduction of 50% of interchange fee for business units such as healthcare, hospitals, schools, hotels, restaurants …

In the long term, VNBA recommends that Visa and MasterCard reduce the payment gate fee by 50% for online payment transactions to promote non-cash payment to USD 0.015 / transaction.

At the same time, simplify the fee collection mechanism to limit the situation of over-charging fees to support Vietnamese banks in collecting fees, and have preferential policies for domestic transactions to reduce the burden and promote transactions. foreign card …

Answering to the Securities Investment Review on this issue, Ms. Dang Tuyet Dung, Country Director of Visa Vietnam and Laos, said: “Visa is currently promoting exchanges with banks and global partners to respond. with the effect of the Covid-19 epidemic. We also consider many aspects of the business model to ensure that partners and communities are provided with the necessary support, focusing on the most urgent issues of their business activities. ”

The same problem, the question was also sent to MasterCard, but the organization did not respond.

Sharing with the Securities Investment Review, the director of the number one joint stock bank said: “There is a fact that Vietnam is assessed as a small market and the presence of international card organizations. clear. In particular, cash usage habits in Vietnam are still higher than other countries in the region such as Singapore, Malaysia …, so they have not gone into the market. Therefore, it is difficult to expect any promise or support. ”

Source: https://tinnhanhchungkhoan.vn/ngan-hang/ngan-hang-viet-kho-duoc-giam-phi-the-quoc-te-325423.html