Commercial banks will have to switch 30 percent of their current magnetic strip ATM cards to chip cards by the end of this year (Photo: TPBank)Hanoi (VNS/VNA) - Under a newregulation, commercial banks will have to switch 30 percent of their currentmagnetic strip ATM cards – more than 25 million in total – to chip cardsby the end of this year to enhance safety and service quality.
Under Circular 41/2018/TT-NHNN, which willreplace Circular 19/2016 as the regulation on bank card operations starting onFebruary 18 this year, commercial banks must increase the ratio of chip cardsto at least 60 percent by 2020. This means at least 51 million cards will usechip technology. The regulation will ensure the country has completely switchedto chip cards by the end of 2021.
The new regulation also stipulates cardpayment institutions must ensure that at least 35 percent of their ATMsand 50 percent of their points of sale (POS) accept chip cards by the endof this year. The ratios are required to increase to 100 percent by the end of2020.
During the transition period, institutionsmust ensure all their ATM operations run smoothly, stably and safely to protectthe interests of cardholders.
Under the new circular, SBV also requires alldomestic chip cards must meet standards issued by the bank in October lastyear. The cards must be compatible with EMV standards as well as the standardsof international card organisations such as Visa, MasterCard, JCB and UnionPay.
Statistics from the SBV showed that as ofSeptember 2018, the country was home to more than 18,170 ATMs and 294,500 POSmachines, serving over 85 million ATM cards with magnetic strips. Theseold-style cards can be easily hacked due to weak security features.
International card-issuing organisations haveasked Vietnamese banks to switch to chip cards that meet EMV standards toincrease safety amidst a growing number of information thefts. Security expertshave also warned Vietnam’s delayed transition to chip technology could put thecountry at risk of becoming a ‘haven’ for card criminals from around the worldas it is among the dwindling number of countries where the use of magneticswipe cards is still prevalent.
Commercial banks are in the process ofswitching over to the new cards because of their stronger security features.However, some banks say the switch faces multiple barriers. They will have toupgrade their technology and replace ATMs and POS terminals with newer onesthat are compatible with chip cards.
According to banks, issuing a chip card cancost some 1.50-2.50 USD, meaning they will have to spend between 105-175million USD for the transition, in addition to the cost of upgrading ATMs andcore banking systems to adapt to the change.-VNS/VNA
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