Plastic reigns supreme in Vietnam

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A recent report from research firm Euromonitor International on Vietnam Financial Cards and Payments in 2010 read that total card transactions value in the country was reportedly around VND435.3 trillion ($21 billion) by the end of 2010, a year-on-year increase of 32 per cent against 2009, much higher than average growth rate of around 20 per cent in the past five years. In 2005, the report said the value was VND21.6 trillion ($1.04 billion).

The card transaction value comprises ATM transaction value and card payment transaction value.

It is estimated that total card transaction value in Vietnam will be around VND510.6 trillion ($24.6 billion) this year from 37.7 million cards, a year-on-year increase of 17 per cent and 28 per cent of value and card numbers, respectively.

Vietnam reportedly had 29.4 millioncards in circulation which comprises ATM or debit function cards, credit and pre-paid function cards by the end of last year. There were 384,800 credit cards and 28.6 million ATM or debit function cards. The remaining 464,600 cards were pre-paid ones.

Of these, ATM transactions value accounted the largest amount, 82 per cent of the total card transaction value, card payment transactions value ratio ranked the second with 17.9 per cent of the total.

Credit card transactions value reported a slow growth, valued at VND5 trillion ($241 million), a year-on-year growth of 16.2 per cent.

In 2010, the use of credit cards remained limited to Vietnamese consumers who traveled frequently to other countries, such as entrepreneurs and managerial staff. Charge cards and store cards are also expected to benefit from this in the short term and demand for such cards is expected to increase, according to the report

“However, credit card transactions are expected to grow strongly over the forecast period, by a constant retail value compound annual growth rate of 25 per cent, owing to efforts on the part of the government and financial institutions to improve the credit rating system,” the report read.

In 2010 all local card issuers such as Vietcombank, ACB and DongA Bank in Vietnam had already linked with three local card operators - Vietnam National Financial Switching JSC, Smartlink Card Services JSC and Vietnam Bank Card JSC. 

The number of points of services (POS) in Vietnam is targeted to reach the number of 500,000 this year against 50,000 only by the end of 2010. Meanwhile, 40 domestic banks will be connected to provide a larger common-based infrastructure for card holders.