ATM cardholders get zapped

From early April, many banks rushed to hike ATM service charges.

For example, Vietcombank began to charge its cardholders with remittance services from early April, with a fee level at VND3,300 per each transaction. One month later, Techcombank lifted cash withdrawal service fees from VND3,300 to around VND6,000 each transaction applicable to cardholders of other banks. Charges levied on other transactions like checking balances, remittances and printing statements hiked from VND1,650 to VND3,300 per time.

Big players like BIDV and Agribank also came up with charging internal network transactions. In fact, 40 per cent of ATMs are managed by three leading banks. Accordingly, of the 14,000 ATMs currently in place, Agribank takes the lead with 15.4 per cent, followed by VietinBank with 13.4 per cent  and Vietcombank 12.5 per cent.

“Card services are crucial in retail business promotion. Hence, our bank will roll out better grade cards targeting wider customer segments in the coming period. However, charging ATM services is important for banks to source extra investment to ameliorate service quality,” said Techcombank’s personal financial services head Dang Tuyet Dung.

“A bank spends an average VND50 million ($2,400) per month on operating and maintaining an ATM against a low interest generated by ATM account balance,” said a card centre director at a top-ranking bank.

Industry experts, however, assumed if ATM services were free, banks would not be hurt since apart from the interest gained from customer account balance, card-based payment services would promise banks success via e-commerce development.

“ATM benefits are huge especially in promoting bank brand value although ACB does not put profits at top priority with ATM investment,” said an ACB executive.

“Banks collecting ATM services charges is rational, however, it could push people into going to banks for cash withdrawal which goes against the government determination to promote non-cash payment,” said former State Bank governor Cao Si Kiem.

State Bank Payment Department deputy head Duong Hong Phuong supposed banks would further hike card services quality and efficiency, such as through issuing co-branded cards. In fact, several banks have tied out with diverse firms in aviation, retail, and petroleum sectors in launching co-branded cards which helps promote non-cash payment whereas generating an additional source of incomes to banks.