Illustrative image (Source: thanhnien.vn)HCM City (VNA) – The State Bank of Vietnam has instructed banks to quickly carry out a plan to convert all magnetic cards into chip cards to prevent fraud.
Late last year the central bank announced that all ATM cards would be EMV-standard chip cards by 2020 to ensure safety for banks and their customers and reduce risks in e-commerce for both buyers and sellers.
Napas has been assigned to work with domestic banks to implement this scheme based on a road map. Napas is the new name of the National Payment Corporation of Vietnam, which was formed through a merger of the Vietnam National Financial Switching JSC and Smartlink Card Services JSC.
Its major shareholder is the SBV, which manages and operates the national card switching system.
According to the latest statistics, there are 90 million cards issued by 43 banks, of which 80 million are ATM cards.
Napas Director Nguyen Tu Anh told the online Vietnam Breaking News that most cards did not meet international security standards.
Many nations such as the US and China have switched to chip cards.
“If Vietnam does not carry out the conversion, cardholders will easily fall victim to data loss and fraud,” Anh warned.
Besides security, the conversion to the new card is also meant to get infrastructure ready for the application of new payment technologies in the near future, according to Anh.
Chip cards, e-wallets and bank accounts are tools to help people make payments without using cash.
Five banks will be chosen to trial the conversion and other banks follow suit.
The five will have to gradually collect magnetic cards from cardholders and replace them with the new ones, and upgrade ATMs and credit card readers to make them compatible with the chip technology.
The banks will announce their replacement road maps and launch programmes to encourage customers to change their cards by 2020.
A spokesperson for Saigon Commercial Joint Stock Bank (SCB), who asked not to be named, said the lender issued nearly 240,000 cards of all kinds.
“The bank is making all necessary preparations for replacing magnetic cards with chip cards according to a road map outlined by the central bank.
“SCB, together with all other banks, the central bank and relevant agencies, will set standards for domestic chip cards and seek to apply those standards in 2017.”
SCB plans to upgrade its chip card issuance and chip card-based payment systems before replacing customers’ cards 12 or 18 months before the SBV’s deadline.
But a spokesman for the HCMC Development Commercial Joint Stock Bank (HDB) said banks could not make the switch immediately since standards for chip cards had not yet been announced.
A senior expert with experience in bank cards agreed with the need to shift to chip cards since they offer more advantages including higher level of anti-fraud capabilities.
But they cost 23,000-35,000 VND compared to only 3,000-4,000 VND for magnetic cards.
“The replacement should be done gradually to reduce the cost burden for both issuers and holders.”-VNA
