VietNamNet Bridge – Though credit cards have become more popular to Vietnamese people, only one percent of population use the modern method of payment.
A survey on personal finance of Vietnamese consumers in 2010 which has been released by Nielsen, has pointed out that though Vietnamese people’s awareness about credit cards has been heightened over the last few years, the percentage of Vietnamese people using credit cards in making payment remains modest.

36 percent of polled people said they do not use credit cards because they still do not have the demand, while 19 percent said they lack information. Eighteen percent of polled people said they do not like credit cards because of inconvenience and complicated procedures, and seven percent said the fees charged by commercial banks are overly high.

POS still encourage payment in cash

Observers have pointed out that Vietnamese people still turn their backs to credit cards because they still cannot find it more convenient to make payment with cards than in cash. The problem is that many POS (points of service) in Vietnam still charge high fees on the payment with credit cards.

Nhan, an officer of a bank in HCM City, said that she was vexed when she was charged fee when she made payment for the hotel rooms at some resorts in Binh Duong and Phan Thiet, and at some retail points in HCM City. Though the sale points announced they accepted the payment with credit cards, they still wanted customers to make payment in cash.

“If you pay with credit cards, you will have to pay the fee of three percent,” Nhan said.

Saigon tiep thi’s reporters, who acted as buyers at some shops on Nguyen Dinh Chieu Road in HCM City, were also advised to make payment in cash, or they would be charged fees.

When an owner of a shop was asked why he imposed the kind of fee which is not stipulated by commercial banks, he said that in general, banks collect transaction fees, about 2-3 percent of the total values of the bills paid with credit cards. At some other shops, where people mostly pay in credit cards, the fees have been counted on the sale prices already. Meanwhile, at his shop, 95 percent of customers pay in cash, therefore, the quoted prices do not include the fees.

“If we do not collect fees, we would incur losses,” he explained.

Especially, the high interest rates applied for credit cards are very high, at 22-24 percent per annum (some banks set up the interest rate at 28 percent), which has made people hesitate to use credit cards.

Some big shops in HCM City have confirmed that the number of buyers who pay with credit cards has decreased by 15 percent recently.

Dr Le Tham Duong, a well known economist, said that in general, Vietnamese people do not want to borrow on interest, even though they borrow money via cards. He has also warned that once the lending interest rates become overly high, consumers would resume their habit of making payment in cash.

It is estimated that about three million credit cards have been issued, while many card holders have not used the cards for making payment, and they simply keep the cards in their wallets.

Customers can sue POS?

Under the current regulations, POS are not allowed to charge fees on clients, and commercial banks need to inspect POS and impose fine on the POS which collect fees. If POS continue violating the regulations, banks will have the right to terminate the agent contracts with the POS.

However, in fact, banks have not been doing this well, for many reasons. This explains why numerous POS still collect fees from the clients who pay with cards, especially in tourism cities such as Hanoi, Hoi An and HCM City.

Currently, Visa International is running a committee which specializes in supervising POS and reporting violations to payment banks for suitable treatments. The customers have been advised to keep invoices in case they are charged fee and need to lodge complaints to the card issuers for fee reimbursement.

Most banks are offering the grace period of 45 days since the day the transactions are made

CV