Hanoi Times - The number of Vietnamese using debit and credit cards has grown to 900,000, or o­nly o­ne% of the country’s population, according to VISA International.

The popularity of the cards in Vietnam, however, has been spreading in the past 10 years, as the country’s economic growth rate averages 7% each year, with a record 8.44% growth last year.

The cards are used in the increasing number of shopping malls that carry luxury or world-class brands of consumer goods.

The number of card holders is much higher in other Asian countries, with 5 million in Malaysia or 20% of the population, and 3.08 million or 68.5% in Singapore.

In Thailand, 6.9 million or 10.6% of the population, hold cards, according to Truong Minh Ha, VISA International’s chief representative in Indochina area.

Hong Kong has o­ne of Asia’s highest percentages, with multiple cards owned by individuals. The number of cards doubles as far as the territory’s population is concerned.

Still, most Vietnamese continue to make cash payments and the number of salaries paid via a bank account is still modest, according to Trinh Thuong Thuc, head of credit of Vietcombank’s Ho Chi Minh City branch.

Deputy General Director of East Asia Bank (EAB), Phung Duy Khuong, said that many people still thought that payment cards were o­nly for higher-income earners and for those who frequently travelled abroad.

Contributing to the problem were banks; weak regulations o­n loans and excessive amount of time spent o­n loan collections. Banks were still hesitant to issue cards for fear of risks, Thuc said.

Ha, however, said bank had sufficient foreign currency exchange fees, service fees, and mortgaged assets, more than many other countries.

There are 22 banks participating in the VISA payment system, with 10,000 Point of Sale terminals (POS) at shops nationwide.

About 50% of banks charge fees for purchase has made with credit or debit cards, while o­nly 10% does so in Cambodia, leading to more infrequent use in Vietnam.

High services fees for card payments also account for the decline in the number of foreign tourists in Vietnam, according to Ha.

Nguyen Tu Anh, general director of SmartLink Card Service Co., said Vietnam’s personal database procedures o­n card issuance were not working well.

Banks had not identified the right customers, she said.

Some customers who qualify have low demand for the cards, while others who have high demand can o­nly receive a card with a secured deposit paid in advance.

Banks should improve their marketing strategies so that consumers can understand payment cards’ benefits, Khuong said.
More card alliance should be established and more POS should be installed throughout the country, Khuong said, adding that bonus point accumulation and service fee cuts should also be offered.