Banks promote use of international payment cards

Contributing to satisfy the needs for foreign currencies of individual customers, commercial banks are accelerating the development of international card services, particularly international payment cards.

According to Official Document 2033/NHNN‐QLNH dated March 12, 2011, the State Bank of Vietnam (SBV) has requested credit institutions to enhance the opening of international payment cards to facilitate individuals to use international payment cards while making payment abroad.

Therefore, many commercial banks are actively launching various promotion programmes to make payment by cards. Duong Mai Hoa, deputy director general, Head of Retail Banking of Vietnam International Bank (VIB) said that VIB is encouraging customers to use international payment cards when travelling abroad.

When using international credit card or international prepaid card abroad, the cardholder must pay currency conversion charge, typically two to four percent of the spent money. However, this charge, according to Hoa, is still better than buying foreign currencies on free market with the difference sometimes of nearly 10 percent compared to banks’ exchange rate.

According to Nguyen Hung, general director of VPBank, individuals are allowed to hold maximum $7,000 in cash when travelling abroad, declaration must be made if the amount is larger. However, if using card, this is not limited.

According to leaders of some commercial banks, banks promote the development of international card services to increase profits while they have to tighten lending to non‐manufacturing sector. Nguyen Dang Hung, deputy general director of Smartlink Card Services Joint Stock Company said that the market for bank cards in 2011 promises to be exciting as some foreign banks are also issuing cards.

Latest figures of the Vietnam Bank Card Association show that to date there are 1.6 million international cards issued (including 340,000 international credit cards) out of the total 29 million cards of all kinds.

In the report forecasting the payment card market in Vietnam to 2013, market research firm Research and Markets (US) mentioned that from 2008 to 2010, the total number of payment cards issued in Vietnam nearly doubled. Not only payment cards, credit cards and debit cards, etc. have also developed rapidly in the recent years.

According to this market research firm, from now until 2014, the card market of Vietnam would grow by about 18.5 percent, and card‐issuing companies, suppliers, and manufacturers in Vietnam would have great opportunities in gaining market shares. – Vietbiz24

Tags: international payment cards