Millions of credit cards idle in Vietnam

About 20 percent or 20 million Vietnamese residents have bank accounts but the number of issued cards quadruples it to reach 86 million this year meaning tens of millions of cards have been idle, according to the General Statistics Office of Vietnam.

Most bank cards have been used for withdrawing cast at ATM posts in Vietnam. This woman is photographed at a supermarket in HCMC (Photo: SGGP)

The Vietnam Bank Card Association said that the number of cards issued this year has been up 30 percent over 2013, comprising 90 percent domestic cards and 10 percent international cards.

Banknet.vn reported that 50 percent of current payment cards in Vietnam do not operate at all.

The above numbers prove that bank card issue has run after quantity not customers’ demand, causing waste because it costs an average of US$3-5 to issue a card.

In addition, most active cards have not been used for any other bank service except cash withdrawal from ATM posts. Statistics from banks show that 90 percent of cards have been used for that service and the rest 10 percent for payment via POS machines.

The condition has brought banks little opportunity to increase their service revenue and wasted their technologies.

Mr. Le Van Tuyen, head of the Payment Development Division under the Payment Department of the State Bank of Vietnam, said that cash payment has been popular in Vietnam and the ratio of cash by GDP in the country has been higher than many nations.

Card services have not been designed suitably and their advertisement has been little, he said.  The market has nearly eight million international payment cards with diversified products. However they have not been popularized to people.

Meantime, 90 percent of domestic cards have been used widely with limited products and rather similar functions.

Therefore, instead of running a card issue race, banks should optimize their services to lure customers.

Bank services should develop towards market demand while products must be designed variously and conveniently, including items suiting demand of most residents to high class products on financial consultancy and asset management.

Improving card use effectiveness will also help implement the Government’s policy on cash payment reduction.

By Hanh Nhung – Translated by Hai Mien

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