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Vietnamese card market both lucrative and risky

Update: 27-12-2011 | 00:00:00

The Vietnam Banking Card Association has predicted that about 40 million cards would be issued by December 31, 2011. The total turnover of cards of different kinds is estimated to reach 3.2 billion dollars by the end of the year, while the total payment turnover of domestic ATM cards would be 2.4 billion dollars.

 

Market growing fast, but…

 

By June 30, 2011, Vietnam had issued 36 million cards, seven times higher than that of 2006, which includes 90 percent of domestic debit cards (32.4 million cards), and 10 percent of international cards (more than 1.2 million debit cards, and 800,000 international credit cards) and pre-paid cards. There had been 70,000 POS.

 

There are now about 13,000 auto telling machines ATMs, which is four times higher than 2006. Banks now not only provide basic services such as cash withdrawal, money transfer, but also have been trying to provide more added value services such as the payment for electricity, water, telecommunication service, insurance bills.

 

However, according to the Vietnam Card Association, the Vietnamese card market development level remains below than the potentials.

 

Nguyen Thu Ha, Chair of the association, said that the unhealthy competition among banks and the lack of connection among POS, the risks in online payment all have also hindered the development of the card payment.

 

Analysts comment that the number of 40 million cards issued is not big if compared with the total population of 90 million people, and that the Vietnamese card market is still very lucrative for banks.

 

Though the number of card has reached the level nearly equal to 50 percent of the total population, cards remain popular only among a part of urbanites.

 

To date, the Vietnamese card payment network has got ready to accept Visa, MasterCard, American Express, JCB, Diners Club, CUP and DiscoverCard, the most popular card brands now in the world.

 

… Risks exist

 

Also according to the card association, the frauds in the international card payment increase rapidly in 2011. The total value of fraud transactions reached one million dollars in the first quarter of the year and 1.5 million dollars in the second quarter, which is 3-5 times higher than the same period of the last year and the last quarters of 2010. The ratio of fraud cases on transaction value has also increased by 2-3 times.

 

As for ATM cards, five fraud cases have been discovered so far this year, where devices were installed at ATMs to steal information of card holders. Investigation agencies have doubts that about 470 cards had information stolen which has caused the loss of 300 million dong.

 

According to Le Minh Loan, a senior official of the Ministry of Public Security said that the proportion of card criminals tends to increase. Criminals illegally use the card information of other card holders to place orders for goods online, especially for electronics, and air tickets.

 

Also according to Loan, a lot of cases have been discovered recently, where foreigners used counterfeit credit cards, made in foreign countries, to purchase goods with the payment via cards. About 10 such cases have been discovered so far this year. Most recently, a Malaysian citizen was discovered as committing frauds and he has been sentenced to 36 month jail.

 

Ha said that the figure of 3 million dollars worth of fraud transactions is not big if compared with the total payment turnover of 3 billion dollars. However, Ha said that banks need to join forces with investigation agencies to protect the interests of people.

 

Vietnamnet/ Source: TBKTVN

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