A series of Agribank’s ATM cards were skimmed one month ago and cardholders reported money in accounts were deducted though they had not made transactions. The case has once again sparked concern over the security of magnetic cards.
Shifting from magnetic to chip cards is believed to be the best solution to protect cardholders.
“The shifting will be mandatory,” a high ranking official of SBV said, adding that chip cards are being used in most countries and there is no reason for Vietnam to delay the shifting process.
According to the National Payment Corporation of Vietnam, by the end of 2018 Asia Pacific had the lowest proportion of converted cards from magnetic to chip. Some other countries have been accelerating the process or have completed it.
Malaysia, called the ‘capital city’ of card crimes, had also completed the conversion by early 2018. Thailand began the conversion in 2016 and the process is expected to finish by January 2019.
As other countries now use chip cards, Vietnam will become the ‘depression area’ where crime is rife. At the 2018 annual meeting, the members of the Vietnam Bank Card Association agreed that the process of shifting to use chip cards needs to be stepped up.
Under a plan drawn up by SBV, the conversion would be completed no later than December 31, 2020.
Meanwhile, the card association has urged SBV to set up standards for chip cards and lay down the policy on the responsibility commercial banks have to take. The issuance or payment banks, if unable to issue or accept chip cards, will have to take full responsibility for incidents caused by card counterfeiting.
However, commercial banks have been warned that the conversion process would be very costly.
At present, a chip card is priced at US$1.5-2.5, or VND35,000-58,000. In case banks order large quantities, 100,000 ore more, the price would be lower.
If so, it would take hundreds of millions of dollars to convert cards for tens of banks. The four state owned bank alone would need US$50 million. Besides, commercial banks would also have to spend their money to upgrade ATMs and POS to make them adaptable to chip cards.
An analyst said banks may consider raising card fees to cover the amount of money they have to spend on the conversion.
An official of SBV said banks can raise fees, but the fees must not exceed the ceiling level stipulated by SBV. He emphasized that chip cards are irreversible and banks must not delay.