The first seven banks, including Vietcombank, BIDV, Agribank, VietinBank, Sacombank, ABBank and TPBank, will now be issuing ATM chip cards to replace the magstripe ones for their customers.
The launch of the first chip card was announced on May 28, in a joint effort between commercial banks, the Vietnam Bank Card Association and the National Payment Corporation of Vietnam (Napas).
These seven lenders currently account for around 70 per cent of Vietnam’s ATM cards issued nationwide.
The country currently has 48 card issuers, issuing some 76 million domestic ATM cards so far.
Commercial banks, in accordance with the central bank’s Circular 41, are required to replace at least 30 per cent of these and upgrade 35 per cent of their ATMs and 50 per cent of point of sale terminals by the end of 2019 to accommodate the chip card transactions.
By the end of 2021, it is expected that 100 per cent of magstripe ATM cards will be fully converted to chip ones.
The domestic chip cards are said to be fully complied with the EMV global standard for chip-based debit and credit cards. EMV chip card transactions are known to enhance securities against fraud compared to magstripe card transactions.
According to the State Bank of Vietnam deputy governor Nguyen Kim Anh, the conversion of magnetic cards to chip cards is an inevitable trend that helps minimise card-related crimes and promote payment safety for cardholders. In the longer term, the switch will enable Vietnam to pursue its goal of a cashless economy in the near future.
While the cost of the chip card is said to be rather high, at 7-8 folds higher than the cost of issuing a magstripe one, banks stressed that the replacement is necessary and they will be looking into cutting the cost for their customers in the first stage.