Local banks to team up on cards

Local banks are getting together to form a non-cash payment system

Under the deal, Techcombank will issue new Fast Access Connect 24 debit cards, which will be able to be used in Vietcombank’s 150 automatic teller machines (ATMs) nationwide.
The objective is to create a large network of ATM machines that can be accessed by any ATM card. At present card-holders can only withdraw funds from their own bank’s ATMs.
Through the Fast Access card, those transactions that used to be conducted directly in cash such as the payment of salaries or of telephone and electricity bills can be now done at Vietcombank ATMs.
This kind of alliance is not new in the Vietnamese banking sector, according to Vietcombank director, Vu Viet Ngoan, but “this is one of the first moves to cooperate in payment card technology in an effort to reduce cash-based transactions”.
“It reinforces that to develop the card market in Vietnam, and to modernise the banking sector, cooperation among banks is a must,” he said.
Ho Chi Minh City-based State Bank director Tran Ngoc Minh agreed: “Not every bank in Vietnam has adequate capital and sufficient experience with technology to proceed alone with the credit card system.
“Local banks, therefore, should get together to establish a general infrastructure system on which they can install ATMs and launch credit and debit cards that are easily accepted as part of a widely connected system.”
At present, 10 banks in Vietnam have their own international credit card systems but ATM transactions can only be made at three banks, the state-owned Vietcombank and two foreign banks, HSBC and ANZ.
For this reason more and more domestic banks, mainly joint-stock commercial ones, are seeking ATM alliances with the bigger banks, such as that between ANZ and Sacombank and Phuong Nam joint-stock bank.
Techcombank’s card manager Dinh Viet Cuong said the arrangements were of mutual benefit.
“On one hand, smaller banks like ourselves can make use of the advanced technology and electronic banking capability of the bigger banks, but on the other it helps the bigger banks like Vietcombank gain more customers thanks to our growing branch network,” he said.
The card market in Vietnam is no longer dominated by giant banks, a common tendency over the world.
According to the latest report from the State Bank, non-cash transactions in Vietnam this year accounted for 86 per cent of total transactions, the country’s highest-ever rate, up 21 per cent on last year.
Speaking at the annual review of the banking sector at the end of the year, State Bank governor Le Duc Thuy called this one of the biggest achievements of the banking sector and praised the dynamism of the commercial banks as the reason behind the achievement.
Vietcombank currently leads the market with a 50-per-cent share in local credit cards and 150 ATMs nationwide. ANZ controls 30 per cent and HSBC holds the remaining 20 per cent.