Workers at industrial parks in the southern province of Binh Duong queue up at BIDV's ATMs to withdraw cash.(Photo: VNA)Hanoi (VNS/VNA) - The National Payment Corporation of Vietnam (NAPAS) hasannounced a fee reduction for its local switching system services with an aimto encourage banks replacing their current magnetic strip ATM cards with chipcards ahead of schedule.
Accordingly,banks will enjoy a 47-80 percent fee reduction for NAPAS’s switching systemservices (depending on kinds of transaction) if they complete technicalrequirements to enable the replacement of their magnetic strip ATM cards withchip cards from May 1 this year.
Accordingto a SBV’s plan, banks are required to replace 30 percent of their currentmagnetic strip ATM cards, equal to more than 25 million in total, to chip cardsby the end of this year to enhance safety and service quality.
Underthe plan, banks must increase the ratio of chip cards to at least 60 percent by2020. This means at least 51 million cards will use chip technology. Theregulation will ensure the country has completely switched to chip cards by theend of 2021.
Theplan also requires card payment institutions to ensure that at least 35 percentof their ATMs and 50 percent of their points of sale (POS) accept chip cards bythe end of this year. The ratios are required to increase to 100 percent by theend of 2020.
Statisticsfrom SBV showed the country was home to more than 18,170 ATMs and 294,500 POSmachines, serving more than 85 million ATM cards with magnetic strips. Theseold-style cards can be easily hacked due to weak security features.
Internationalcard-issuing organisations have asked Vietnamese banks to switch to chip cardsthat meet EMV standards to increase safety amidst a growing number ofinformation security thefts. Security experts have also warned Vietnam’sdelayed transition to chip technology could put the country at risk of becominga ‘haven’ for card criminals from around the world as it is among the dwindlingnumber of countries where the use of magnetic swipe cards is still prevalent.
Commercialbanks are in the process of switching over to the new cards because of theirstronger security features. However, some banks say they face multiplebarriers. They will have to upgrade their technology and replace ATMs and POSterminals with newer ones that are compatible with chip cards.
Accordingto banks, issuing a chip card can cost some 1.5-2.5 USD, meaning they will haveto spend between 105 million USD and 175 million USD for the transition, inaddition to the cost of upgrading ATMs and core banking systems to adapt to thechange.
Bankswhich connect with NAPAS’s automated clearing housing system (ACH) to serve thepayment of retail transactions will also enjoy a 25 percent fee reduction forNAPAS’s switching system services from October 1 this year.
ANAPAS report showed that the number of transactions conducted via its systemincreased by more than 45 percent in 2018 over the previous year with the totalvalue reaching more than 1.7 quadrillion VND (74 billion USD), a rise of 169 percent.-VNS/VNA
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