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Vietnam Business » Vietnam Banking News » ATM cards are now still a safe payment instrument

ATM cards are now still a safe payment instrument

In the world, many countries, especially in North Asia and Europe, tend to use chip cards instead of magnetic cards for security and safety reasons. In Vietnam, according to commercial banks, domestic cards are mainly used to withdraw and transfer money at ATMs or settle payments at POS; hence, magnetic cards still meet the requirements.

Amid rumours on the State Bank of Vietnam’s orientation to shift magnetic ATM cards to using chip-based ATM cards for security and utility reasons, Mr Bui Quang Tien, Head of the Payment Department of State Bank, confirmed that the policy is still in the surveying stage.   Several Vietnamese banks like Vietcombank and BIDV have issued chip ATMs cards. According to a preliminary survey, nine out of 41 banks issued and settled payments in chip cards. As of June 2009, Vietnamese banks issued more than 28,000 chip cards, accounting for some 0.16 per cent of existing cards, some 13,500 points of sales (POS) and 2,000 automated teller machines (ATMs) accepted chip cards, accounting for 48.2 per cent and 22.7 per cent of the system’s POS and ATMs.   Chip cards are proven to store more data and have higher security. They also enable issuers to provide more value-added services, technological applications, and support e-payment and e-commerce.   However, many said magnetic ATM cards are now still a safe payment instrument. In the long term, chip cards can be safer and more popular if issuing costs are lower and people’s incomes are higher. At present, the policy of shifting magnetic cards to chip cards is in the surveying stage. Mr Bui Quang Tien said: “Before the trend of shifting from magnetic cards to chip cards in the world, the State Bank of Vietnam conducted surveys and send documents on this matter to commercial banks. All is in the stages of surveying and evaluation. There has not been a roadmap or official policy for this.”   Many international card payment alliances like Europay, Master Card and Visa recommended their customers and card issuers to shift to use chip cards for risk-reduction reasons. But, Mr Tien affirmed “this recommendation only limits to cards of those alliances, not domestic cards we are using.”

Vietnam Business And Financial News Network. Source [vcci]

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