The Vietnamese market recorded 68.55 million bank cards in use by the end of the first quarter 2014, up 3.5 per cent against 2013, according to Viet Nam Bank Card Association's report. — Photo tuoitre

This is seen as yet another step toward the Government's master plan of non-cash payment system. The draft has just been announced and is pending public feedback.

Customers who deposit or withdraw money via payment accounts at the State Bank of Viet Nam must pay a fee equivalent to 0.005 per cent of the total amount.

Commercial banks or branches of foreign credit institutions are allowed to set their own fee, but it must not exceed 0.03 per cent of total cash deposit value, or 0.05 per cent of total cash withdrawal value from payment accounts. These fees must be publicly listed.

Some industry insiders said that the fee may be necessary to compensate costs of maintenance activities of credit institutions, such as papers, machines, and human labour.

However, they said that the fee should only be applied to institutional customers whose values of transactions were large.

In case banks would like to charge fees to both individual and institutional investors who deposit and withdraw money, they should set a cap at which fees would be applied. This suggestion has been made to exempt the poor from this transaction since their income is already low.

Despite the growing popularity of bank cards that have cut the share of cash transactions in total money supply by cash from 20.3 per cent in 2004, to 12 per cent by the end of 2013, the ratio is still high.

68 million bank cards

The Vietnamese market recorded 68.55 million bank cards in use by the end of the first quarter 2014, up 3.5 per cent against 2013, according to Viet Nam Bank Card Association's report.

Debit cards took 92.14 per cent of the total, credit cards took 3.68 per cent, and the rest were prepaid cards, which were all issued by 52 card issuers. About 15,500 automated teller machines (ATMs) and 137,700 points of sales (POS) have been set up to facilitate the bank card market. The State Bank of Viet Nam aims to cut the cash ratio to fewer than 11 per cent by the end of 2014.

However, Viet Nam Bank Card Association warned that most of card transactions were cash withdrawals while other payment services like POS or money transfers were still modest. Infrastructure for the bank card market still needs to improve to avoid congestion.

Service fees for internet banking in Viet Nam is usually between VND10,000 and VND20,000 (47-96 US cents) per transaction depending on the type and destination of the transaction. Due to fee issues, a large number of employees tend to withdraw sums at once to avoid fees and keep making daily payments in cash. — VNS