Commercial banks in Vietnam will initially replace some 21 million magnetic ATM cards with chip cards beginning May 28, as the State Bank of Vietnam (SBV) has ordered issuing banks to convert their 75 million ATM cards to new chip cards.
|A customer inserts an ATM card into the machine. Commercial banks in Vietnam will initially replace some 21 million magnetic ATM cards with chip cards beginning May 28|
Nguyen Quang Minh, general director of National Payment Corporation of Vietnam (NAPAS), said on May 17 that all essential preparations, in terms of procedures, infrastructure facilities, and technology, are available to support banks with the switch, as required by SBV.
A set of Vietnam chip card standards was custom-made for the local market and are also compatible with EMW international standards, Minh said.
The switch to chip cards will prevent the loss of data and fraud. Other countries in the region, such as Indonesia and Thailand, are reportedly putting plans in place to switch to cards with chips. Officials note that the percentage of fraud transactions dropped significantly thanks to switching to cards with chips.
According to Circular 41/2018 issued by SBV, a detailed roadmap must be prepared for the conversion of magstripe ATM cards to chip cards. By the end of this year, at least 30% of active ATM cards on the local market will be required to contain domestic chips in Vietnam, equivalent to some 21 million magnetic cards to be replaced with chip cards.
Also, all active cards issued by commercial banks must be converted by the end of 2021.
The applying of common standards on chip cards among credit institutions and payment service providers is expected to offer customers more convenient services and encourage the growth of non-cash payments, according to local banks.
The NAPAS representative added that seven commercial banks in the country have collaborated with NAPAS to implement the roadmap for the switch and issue chip cards late this month, including the Bank for Foreign Trade of Vietnam, the Joint Stock Commercial Bank for Investment and Development of Vietnam, and the Vietnam Bank for Industry and Trade.
Some commercial banks said that the switch to chip cards has posed multiple difficulties, especially as materials needed to make chip cards are costly, alongside the high costs to upgrade ATM machines and POS terminals so that are compatible with chip cards. However, they will not charge customers for converting magnetic cards to chip cards or issuing new chip cards, as required by SBV. SGT