VietNamNet Bridge – Issuing co-branded cards proves to be a new way for commercial banks to follow in the context of the credit card market in Vietnam getting saturated.

Benefits for all three parties

The year 2013 witnessed the boom of co-branded cards co-issued by banks, retailers, air carriers, schools or football clubs. It is estimated that some 20 credit cards of this kind have been available in the Vietnamese credit card market.

These include the cards issued by Co-op, a retailer, in cooperation with Vietcombank, BIDV and Dong A Bank, the cards issued by Vietnam Airlines and Techcombank Visa, Vietnam Airlines and VP Bank Platinum MasterCard, Bac A Bank and TH True Mart, BIDV and Lingo Card, Visa Debit Vietinbank and Otofun, Visa Debit Vietinbank- Webtretho; Sacombank- Sony Visa, or BIDV- Manchester United.

The co-branded cards have been launched into the markets just within a short period, which can show the heat of the market.

The benefits co-branded cards can bring to bankers, businesses and consumers are very clear. Bankers, when cooperating with retailers or businesses, can approach to the businesses’ existing clients. This helps them cut down the expenses on card issuance and management. And this also allows banks to expand their market share.

Businesses, when cooperating with banks in sharing client database and developing the payment through banks, can get the banks’ support in the client information management, transaction and cash flow management. Especially, they can cut down expenses with non-cash payment.

Businesses also understand well that the joint products of banks and businesses would help both of them popularize their images and increase the brand recognition in the public, especially when businesses can cooperate with prestigious banks.

With the banks’ support through the preferences in payment method, retailers can run big sale promotion campaigns applied to co-branded card holders.

Most banks are now running promotion programs, offering the 5-10 percent discounts to the clients holding the cards issued by their partner businesses. This helps stimulate the demand, thus allowing manufacturers and retailers boost sale.

Meanwhile, customers, besides the price discounts, which allows them buy goods at lower prices, can use the cards to deposit money, withdraw cash, remit money and make online payment.

Bright prospect for co-branded cards in Vietnam

A report of the State Bank of Vietnam showed that there are 52 card issuers in Vietnam which have issued 64 million cards so far, 90 percent of which are domestic debit cards. There are 14,700 ATMs and 122,000 POS set up nationwide.

Analysts have noted that the Vietnamese card market is getting saturated, which can be seen in the growth slowdown in the number of newly issued cards.

In 2010-2012, issuers saw the annual growth rate of 30 percent, while the figure has decreased to 4 percent, even though banks keep launching a lot of attractive promotion campaigns.

Analysts believe that banks have taken a wise move when trying to develop co-branded cards. Now is not the time for them to focus on increasing the number of cards issued, but on improving the card services by offering more facilities to clients.

Chi Mai