With its own advantages, domestic credit cards are gradually being accepted by people and businesses, thereby promoting cashless payments, developing electronic payments and limiting black credit.
High safety and security
Previously, most users who wanted to open a credit card would choose international credit cards issued by domestic banks with brands such as Visa, MasterCard, JCB, etc. However, the fee structure of international card organizations applied to banks in Vietnam is very complicated, with a large number of fees. For each card transaction, international card organizations can collect from 3 to 4 types of fees. Therefore, when using an international credit card, both the card issuer and the customer have to pay very large costs.
Officially launching the domestic credit card product line in early 2021, Vietnam National Payment Joint Stock Company (NAPAS) has strengthened cooperation with banks and financial companies to deploy this type of card to users. Domestic credit cards can be used for payment at payment acceptance devices (POS) at stores, restaurants, supermarkets; online payment on e-commerce sites, hotel bookings, airline tickets; and cash withdrawals at all ATMs nationwide of more than 43 banks in the NAPAS member network. In particular, the advantage of using domestic credit cards is that ATM withdrawal fees are much lower than other international credit card products.
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Domestic credit cards are gradually being accepted by people and businesses. Illustrative photo |
Through the function of spending first, paying later and opening a card simply and quickly, this is also an effective method to help people access official loans from banks and financial companies, especially in cases where customers have sudden financial needs, they do not have to resort to black credit loans with high interest rates.
Mr. Nguyen Quang Minh, General Director of NAPAS, said that domestic credit card incentives are no less than international credit cards. Cardholders can borrow money to spend first, then pay later with an interest-free period of up to 55 days. In addition, domestic credit cards apply modern technology, comply with domestic chip card standards of the State Bank of Vietnam and international EMV standards, have high safety and security, and limit risks, fraud, and counterfeiting for cardholders. Contactless domestic credit cards also have the advantage of fast payment, performing a large number of transactions in retail payments. Card users do not need to enter a pin code when paying for small value transactions.
Talking to reporters, Mr. Nguyen Viet Hung, living on Vuong Thua Vu Street, Thanh Xuan District, Hanoi City said: "Since switching to using a domestic credit card, I have found that I have saved more expenses than when using an international credit card before. The interest-free period of up to 55 days along with cashback on some transactions has helped me a lot in balancing my family's finances when shopping."
There is still much potential to exploit.
According to Mr. Pham Anh Tuan, Director of the Payment Department, State Bank of Vietnam, by the end of July 2023, 15 card-issuing organizations had issued domestic credit cards. The number of domestic credit cards in circulation by July 2023 reached over 811,400 cards (an increase of 42.5% over the same period in 2022). In the 5-year period of 2018-2022, the number of domestic credit cards issued achieved an average growth rate of 29.6%/year, higher than international credit cards at 17.72%/year.
It can be seen that, in recent times, card issuing organizations have been proactive and creative in researching, issuing, and supplying domestic card products and services associated with Vietnamese card brands, including domestic credit cards. These efforts of card issuing organizations aim to promote non-cash payments, promote comprehensive finance to cover payment and credit services to the majority of people and reduce the cost of accepting and using cards for card accepting units and cardholders in Vietnam. The goal of issuing domestic credit cards is to aim for simplicity, convenience, ease of use, cost reduction, and suitability to the needs and payment capacity of all people and businesses.
However, currently, there are still many people living and working in rural areas, with stable income, debt repayment ability and need to access and use personal financial services such as daily living expenses, bill payments, money transfers, online purchases on domestic e-commerce platforms, insurance payments... but have not yet accessed and used domestic credit cards. This is a customer segment and a very potential product for domestic credit card issuing organizations to exploit.
Financial and banking experts assess that domestic credit cards are products that support consumer finance, suitable for Vietnam's economic conditions with appropriate bank exchange fees, balancing the interests of issuing banks as well as customers. This is also a solution to promote cashless payments, towards comprehensive finance and preventing black credit. However, the actual implementation results since the credit card was launched in early 2021 have not been really high, not commensurate with the role and potential of this product line. The number of domestic credit cards still accounts for a low proportion compared to the total number of credit cards in circulation (accounting for about 8.7% of the total number of credit cards in circulation).
In order to promote comprehensive financial inclusion and contribute to the fight against black credit, domestic credit cards are considered a very effective tool. Therefore, to promote the development of domestic credit cards, Mr. Pham Anh Tuan proposed that in the coming time, credit institutions need to research and develop modern, safe, and multi-functional domestic credit card products to meet the diverse needs of customers. Domestic credit card products need to be designed to suit customer groups with different consumption behaviors or payment habits. In addition, there should be preferential and promotional policies for customers using domestic credit cards and units accepting payment by domestic credit cards.
Along with that, card issuers and related units need to promote the expansion of the card payment acceptance network, including domestic credit cards; connect payments with public service portals and the fields of transportation, healthcare, insurance, etc.; research, develop and apply innovation in the field of payment on the domestic chip card technology platform. In addition, card issuers also need to actively cooperate with organizations providing intermediary payment services linked to major e-commerce platforms, creating conditions for customers using domestic credit cards to be able to pay at e-commerce platforms as well as at points of sale of goods and services in remote areas. Research and cooperate with banks and foreign card switching organizations to expand the scope of use of domestic credit cards, not only domestically but also for payment abroad, to meet customers' payment needs.
According to QĐND
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