The Hanoitimes - The Vietnam Bank Card Association has agreed to speed up the transfer from magnetic stripe cards to chip cards to ensure the safety for card holders and increase the quality of banking services, according to the National Payment Corporation of Vietnam (NAPAS).
According to State Bank of Vietnam (SBV)’s Payment Department, some 90 percent of Vietnam’s 77 million bank cards are using magnetic-stripe technology, which is easy to forge, and lags behind the global trend of chip cards.
In 2016, the SBV also issued a plan that required local commercial banks to make the switch from magnetic stripe cards to chip cards no later than December 31, 2020, in an aim to address concerns over users’ safety and service quality.
Some 70 million magnetic stripe cards will be replaced by chip cards by 2020.
NAPAS recently completed the building of a standard set for domestic cards. The new set is compatible with EMV standards as well as standards of international card organisations such as Visa, MasterCard, JCB and UnionPay.
NAPAS has handed over technical manuals to banks, point of sale (POS) terminal suppliers and card-issuing institutions so that they can adjust their systems in line with the new standards.
With the new set, SBV expects some 70 million magnetic stripe cards in Vietnam will be replaced by chip cards with EMV standards by 2020 as planned.
Vietcombank’s deputy general director Pham Anh Tuan hoped that based on a common standard, card synchronization would take less time and require less investment or interbank transaction fees. This would also minimize money and data theft at ATM’s in the context of rising high-tech crime.
Earlier, international card-issuing organisations had recommended Vietnamese banks to use chip cards meeting EMV standards to increase safety amidst growing card information theft. Security experts, meanwhile, have warned that Vietnam’s delayed transition to chip technology can put the country at risk of becoming a “haven” for card criminals from around the world as it is among the few countries where the use of magnetic swipe cards is still prevalent.
However, many local banks are still issuing magnetic strip cards as domestic payment cards for their clients instead of shifting to chip cards mainly due to concerns over high investment costs.
According to local lenders, issuing a chip card can cost them some US$1.5 - 2.5. It means that they will have to spend between US$105 - 175 million for the transition, not to mention the additional costs of upgrading their ATM machines and core banking systems to adapt to the change.
Admitting the transition could be a financial burden for banks with a large number of issued cards, but the Vietnam Bank Card Association (VBCA) said that the transition to a global, sophisticated card security system is inevitable, despite current difficulties.
Some banks such as Vietcombank, Vietinbank and TPBank have so far successfully issued chip-implemented debit cards after participating in the National Payment Corporation of Vietnam’s trial issuance period of EVM cards, before mass implementation.
Currently, many Vietnamese banks are having trouble dealing with card data theft and so-called skimming at ATMs. The latest case was related to 400 Agribank accounts being stolen money last month.
The Ministry of Public Security’s C50 Division has arrested dozens of suspects on charges of criminal theft and identity theft in ATM and bank card-related crimes between 2015 and 2017, with damages ranging from hundreds to billions of VND.
C50 also stated that most thieves who steal money by using skimming devices are of foreign nationalities, including China, Malaysia, Bulgaria, the UK and the Netherlands. They commonly target large cities like Hanoi, Ho Chi Minh City, Da Nang and Hai Phong.