Vietnam is ready to convert magnetic cards into local chip cards

Stable, safe, smooth conversion and ensure the interests of card holders, aiming to convert all bank cards from magnetic cards to domestic chip cards using safe, secure and convenient chip technology Useful, multi-application for all Vietnamese people.

Under the direction of the State Bank, Vietnam Bank Card Association (VBCA) in collaboration with Vietnam National Payment Corporation (NAPAS) and the first 7 banks including: Vietcombank, Vietinbank, BIDV, Agribank , Sacombank, TPBank, ABBank officially announced the launch of domestic chip card products of banks.

Converting domestic payment cards from magnetic cards to chip cards is one of the key solutions of the banking industry approved by the Prime Minister in the Project to develop non-cash payment for the period 2016-2020 (Decision Decision 2545 / QD-TTg). Following the Prime Minister’s direction, based on the current laws and regulations on standards and technical regulations, on October 5, 2018, the Governor of the SBV signed Decision No. 1927 / QD-NHNN announced Basic set of standards on domestic chip cards; It details the technical requirements of domestic payment cards in Vietnam based on contactless and contactless chip technology, compatible with international EMV standards. Following that, the Governor of the SBV issued Circular No. 41/2018 / TT-NHNN dated December 28, 2018, stipulating the roadmap for converting bank cards to cards in compliance with the basic standards for domestic chip cards; Accordingly, the conversion schedule for card payment organizations is until December 31, 2020 and for card issuers as of December 31, 2021.

Domestic chip cards fully meet the technical factors of safety and security according to EMV international standards, limiting the risk of fraudulent frauds in card payment, ensuring payment security for customer; serve as an important platform for integrating and applying for non-cash payment services and services for services such as health, education, transportation, insurance and public services. The use of domestic chip card payment with contactless technology for small value transactions will bring a new experience to customers when just one touch of the card to the POS machine can be completed. deal. Issuing banks will set a threshold of payment value without customer authentication for small value transactions.

Speaking at the event, Deputy Governor of the State Bank Nguyen Kim Anh emphasized: “The conversion of domestic chip cards is an indispensable trend of countries in the region and the world in the face of technological crimes. However, the Vietnamese Banking Card Association, banks, Napas and related units need to coordinate closely and actively. Moreover, in order to accelerate the conversion of domestic chip cards in accordance with the schedule issued by the State Bank, the conversion must ensure the card operation continues, stable and safe; At the same time, it is necessary to ensure legal rights of card holders during the conversion process. ”

Currently, Vietnam has 48 domestic card issuers with a total of about 76 million cards, more than 261,000 POS and 18,600 ATMs; most of the POSs have followed the EMV Standard, so deploying local chip cards on devices that accept cards will not be too complicated. According to the plan, by December 31, 2019, commercial banks will convert at least 30% of the number of cards from domestic, 35% of ATM and 50% of existing POS to chip technology. exposed and not exposed. All ATMs and POS on the market ensure compliance with VCCS Standard on 12/31/2020. By December 31, 2021, all domestic cards in circulation of card issuers comply with TCCS on domestic chip cards.

Evaluating the implementation of the immediate objectives, Ms. Nguyen Tu Anh, Chairman of the Napas Board of Directors, said: “On the Napas side, we are ready for human resources and technology to support the banks. The other bank is upgrading domestic card issuance and payment system, Napas is studying cooperation with international card organizations in order to co-operate with Vietnamese banks to issue the card market. (co-badge) between domestic chip cards and international chip cards, allowing customers to own this card for convenient use both at home and abroad. converting, aiming to convert domestic chip cards according to the schedule of the State Bank, Napas has implemented a policy of fee reduction switching service up to 80% (depending on the type of transaction) for banks to complete the technical conditions to convert a magnetic card into the domestic chip card standard from May 1, 2019 ”

Exchanging at the event, 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 route. process of SBV. 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.

For the first time, the payment market of Vietnam has applied a unified technical standard compatible with international EMV standards, affirming the autonomy and timely application of advanced achievements of Industry 4.0. payment of banking industry; making payment transactions safer and more secure, creating favorable conditions for banks to develop new and modern payment features for domestic card products; opening opportunities for domestic cards to participate in international integration.

INFORMATION BOX

Vietnam Chip Card Specifications (VCCS)

The set of domestic chip card standards includes contactless and contactless domestic payment card technical specifications, compatible with EMV international standards, so it will support banks to make the conversion effectively. due to the succession of an international card issuance and acceptance infrastructure that is now compatible with the existing EMV. Banks can choose to deploy dual card communication (support both contact and non-contact) in the first phase, reducing a conversion step from the contact chip card to the chip card. No exposure like lessons learned from other countries.

The domestic chip card standard set is a basic platform for digitizing card information on mobile devices, thus enabling users to use their smartphones for payment. In the future, the market will receive a “touch” payment trend, customers only need to touch the card or phone to the device to accept POS to complete the payment transaction.

Remarkable features of domestic chip cards

Safe and confidential
Using microchip to store card information instead of on magnetic stripe, minimize fraud and fraudulent transactions because only the issuing bank can read the data in the card. Each transaction will have a separate authentication code, ensuring no data stealing to fake card transactions.

Optimize user experience

Contactless payment, “tap & go” – “touch and go” along with allowing unacceptable payment of users with small value transactions of contactless chip cards will help speed up delivery processing Translation payment, more convenient than cash payment.
Multi-utility, multi-application in cashless payment
Domestic chip cards can integrate cashless services and payment applications with other industries such as transportation, insurance, health care, education and public services. In particular, the local chip card is optimally designed to apply for payment in traffic with a normal transaction speed of 150-200mns, meeting payment standards in public transport (under 300mns).