Counterfeit transactions have fallen sharply with chip cards (Photo: vneconomy.vn)Hanoi (VNS/VNA) - Despitehigh costs, domestic banks are issuing more chip cards that meet EMVstandards to replace magnetic strip cards in order to improve security andmeet the central bank’s regulations.
According to Pham Dang Khoa, deputy director of Vietinbank’s CardCentre, the biggest problem for banks when it comes to replacing magnetic stripcards is the cost. Banks have to pay for the new cards and investin devices that accept them, such as ATMs and POS machines. Meanwhile,most customers are not willing to pay to switch.
With more than eight million existing customers using magneticstrip cards, Khoa estimated his bank will have to spend a large sum as the costof producing a chip card is roughly eight to ten times higher thanmagnetic strip cards.
To encourage customers to use chip cards, Khoa said VietinBankwould help customers replace their old cards due to the advantages ofthe new ones.
According to Khoa, the information contained in the chips wasencrypted and only the issuing bank could read the data on it. Thus, theyreduce the risk of information being stolen and counterfeits. There have beenno issues regarding security with the new cards, which shows howsecure they are, Khoa said.
Similarly, Chu Hong Ngoc, director of VPBank’s OperationsDivision, said VPBank is determined to offer free cards forcustomers to speed up the replacement.
VPBank has about 1.5 million cards in circulation and more than500 POS machines, and the bank will pay for the full conversion cost, Ngocsaid.
Nguyen Hung, general director of TPBank, said his bank has alsoconsidered offering free replacement in the first phase ofconversion.
In the next stage, depending on State Bank of Vietnam's(SBV) policies as well as the bank's goals, TPBank will try to create thebest conditions for customers, Hung said.
Sharing the same view, Dao Minh Tuan, deputy general director ofVietcombank, said the replacements were free in the first phase.
Vietcombank has some 14 million domestic debit cards incirculation so the conversion cost will be enormous, Tuan said, addingthat his bank plans to replace 30 percent of the old cards as well as 30 percentof ATMs and 50 percent of POS machines in 2019.
Despite these cost concerns, Pham Duy Hieu, general directorof ABBank, said ABBank has set a goal of replacing all magnetic strip cardswith chip cards by mid-2020.
According to banks, many countries in the region such asIndonesia, Thailand and the Philippines have already switched to chipcards.
Statistics show that counterfeit transaction rates decreasesharply with chip cards, they said, adding that chip cards will also helpboost cashless payments in Vietnam.
With the activeparticipation of banks, the SBV expects to complete its plan ofreplacing all 75 million magnetic strip cards in the countrywith chip cards by the end of 2021./.
