HANOI: There is a lot of untapped potential in the market for credit cards in the domestic market, say industry insiders and policymakers during a seminar to promote using cards and being part of a cashless society.
The event in Hanoi last week was co-organised by the State Bank of Vietnam’s (SBV) Payment Department, the National Payment Corp of Vietnam (Napas) and the Lao Dong newspaper.
SBV deputy governor Pham Tien Dung said the central bank has been working and improving on a legal framework to streamline non-cash payments and keep them secure. The central bank considers it a key objective of the banking sector to make it easier to get and use cards and reduce black-market lending.
Regulations have also been implemented to govern non-cash payment methods, in line with the Law on Credit Institutions, which was approved by the National Assembly, including payment setups and QR codes.
Le Anh Dung, the department’s deputy director, said the rapid development of non-cash payment services in recent years has resulted in significant growth in the sector. As of March this year, there were over 150.6 million cards in circulation, a 3.29% increase compared with the same period last year. Of this, over 106.7 million were domestic cards and 43.9 million were international cards.
In the first three months of the year, there were 15 card issuers in the domestic market with over 904,700 cards in circulation, an 18.37% increase year-on-year (y-o-y), outpacing their foreign competitors who posted a more modest growth of just 9.53% y-o-y.
There were 1.3 million transactions using domestic-issued cards in the first three months of this year with a total value of over 10 trillion dong, an increase of 75.43% and 89.85%, respectively. Meanwhile, foreign-issued cards reported growth of 27.26% and 25.1% during the same period.
However, according to industry insiders, Vietnam still has great untapped potential in the card market. With a population of over 100 million, mostly in the youth demographic, a growing middle class and a boom in eCommerce and digital economy, there is plenty of scope to expand.
Domestic card issuers have enjoyed numerous advantages and benefits over the competition thanks to modern infrastructure, compliance to local security standards, low transaction costs and easier access for low-income customers.
SBV deputy governor Dung said the central bank remains fully committed to developing non-cash payment services, including payment cards in the domestic market.
He advised credit institutions to invest in offering more sophisticated, safe and convenient payment services and work with local governments, especially in underdeveloped and remote parts of the country, contributing to comprehensive financial inclusion and reducing black-market lending.
He stressed the importance of enhancing the legal framework for non-cash payments and bank cards, upgrading the interbank electronic payment system, financial switching and clearing systems and bank payment systems to ensure the transactions are safe.
Other key areas include developing a versatile domestic chip card ecosystem and modern credit card products, establishing reasonable fee-sharing mechanisms to support fraud prevention tools and strengthening financial awareness and communication. — Viet Nam News/ANN
