VietNamNet Bridge – There are 28.5 million debit? and credit cards in Vietnam’s market. While people have to queue in front of ATMs  nearly 50,000 POS are left idle. After five years, since with the introduction of payment cards, people still cannot give up the habit of using cash.

A cheapest ATM costs $15,000. This means that over the last five years, commercial banks have spent more than $150 million, or three trillion dong, to develop their ATM network, not including the expenses on technologies and maintenance.

In 2005, there were 1800 ATMs in Vietnam, while the figure rose to 11,500 in 2010. The numbers of POS were 11.000 in 2005 and 50,000 in 2010, according to Euromonitor International, a global market surveyor. 
Previously, people could only made transactions with the ATMs owned by the banks that issued their cards. However, the situation has been much improved. Now card holders can use any nearest ATM/POS, because the three biggest card alliances have reached an agreement on financial switching.

Commercial banks make great efforts to popularize the habit of using cards instead of cash.  A lot of services have been launched by banks. Besides withdrawing money, card holders can also pay for electricity and water bills, Internet and telephone bills, making online payment .

The proportion of the non-cash payments has been increasing. According to Trinh Thuong Thuc, Head of the Card Service Division of Vietcombank HCM City, said that 20 percent of services provided wth the bank’s card is used now, while it was only 10 percent in previous years. The total transaction revenue at POS was 100 billion dong in 2010, nearly double that of 2009.

According to Euromonitor International, in 2010, there were 825.5 million transactions made with cards, while the figures were 20.2 million in 2005 and 609 million in 2009. Credit card owners mostly paid for traveling (30 percent), entertainment (28.5 percent), and clothing, drinks, tobacco. Meanwhile, other card holders paid for clothing (9.5 percent), drinks and tobacco (16 percent), entertainment 11.5 percent and traveling 17.8 percent.

The “dead” and “living” cards

The market survey released by Nielsen in August 2010 showed that only one percent of surveyed people used Internet banking, 23 percent used ATM cards, while only one percent used credit cards.

59 percent of polled people said they did not have the demand to use payment cards, while 31 percent said they did not understandthe services, while 13 said the procedures were too complicated.

Euromonitor said that though young people now have the habit of putting money into banks, cash payment remains the most popular payment method.

Regarding the number of 28.5 million issued cards, analysts say the figure may not truly reflect the current situation, because banks have counted the “dead” cards. Director of the card center of a bank said that only 50 percent of the cards, or 14.2 million cards now still keep regular transactions, while the other are used once every 1-3 months, mainly to withdraw money.

The director said that 80 percent of the cards issued by his banks have been activated, while at other banks, the figure is much lower, about 40-60 percent.

Source: Saigon tiep thi