Plastic set to go the distance

>> Vietnam’s payment card market most dynamic

Standard Chartered Vietnam  announced its successful linkage to Smartlink system in early March 2011. Are there other foreign players intending to follow suit?

Malaysia-based Hongleong Bank and several other foreign banks are collaborating with Smartlink. The cooperation initially covers sharing ATM services and enhancing ties between banks to bring added values to cardholders.

Besides, we have deployed a set of value added services to encourage card-based payment among customers.

How has the participation of foreign banks impacted on the local card market?

The impact is positive as local banks must strive to enhance their competitive advantages through diversifying value added services to benefit customers, better positioning their products and customers, and ameliorating customer-care services and product marketing and so on.

In addition, there will be a tough competition between Vietnamese banks and foreign players to win the services from mid and high-income customer segments in Vietnam.

Foreign banks are reportedly issuing locally used cards to target customers with medium incomes and beyond.

Around 29 million local ATM cards were issued thus far, but most of them were used to simply withdraw money.  How should card-based services be promoted among cardholders?

Stimulating online payment is often grappled with difficulties in the initial stage as it is relevant to consumers’ habits. From 2009, Smartlink tied up with banks to launch e-business services. Online payments currently make up just a fraction in total payment revenue by residents, but it is worthwhile that online payment volumes have rapidly risen in recent years.

The card market has reached a period of in-depth development, thereby banks need to enhance the added values of their cards. In the meantime, developing an extensive point of sale (POS) system is also a must.

Some banks were linked to the POS system in 2010. However, many POS machines did not accept ATM cards by banks outside the system. When will banks all link to the system?

Formerly, POS machines only accepted international credit cards such as Visa or Master card or cards by some local banks. Things are now different with most cards are currently accepted. In 2010, Smartlink succeeded in linking 15 banks in Hanoi and Ho Chi Minh City into the POS system. Card-based payment revenue within Smartlink came to VND20 trillion (around $1 billion) in 2010. We are set to achieve the target of linking all  banks to the POS system in 2011.

Some banks claimed they bore losses from ATM services. Is this true?

Usually banks cannot reap profits in the initial stage of card trading. Some big banks with a rich customer base may catch profits from card value added services.