Consumers not cashing in on cards

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Cao Phuong Anh has three bank cards, but she will not use them to pay for goods and services.

"I shop often at supermarkets and malls, but I pay for everything with cash," Anh said. "Every month, I receive salary and allowances and only use the cards to withdraw cash."

Like Anh, a 27-year-old clerk who works for a communications firm, many people, even residents of major cities like Hanoi and Ho Chi Minh City, still stick to paying for everything in cash.

Non-cash payments using the banking system through cards and even checks are yet to catch on, although the number of bank cards issued has increased in recent years.

The Bank Card Association now has more than 40 members who have issued more than 22 million cards, installed nearly 10,000 automated teller machines (ATMs), and some 37,000 points of sale (POS). However, the total payment via cards accounts for less than 1 percent of the total money withdrawn from ATMs, said the association.

"Most people still prefer to pay in cash and payments via cards are not quite common. Besides, the system of POS is large, but is not fully connected. Only 14 or 15 local commercial banks have connected to the POS network," Nguyen Duc Vinh, chief executive officer of commercial bank Techcombank, told Thanh Nien Weekly. The POS network allows one machine to accept different kinds of cards issued by different banks.

POS are mainly installed in big merchant points such as supermarkets, restaurants and hotels, but even these establishments are not interested in card payments. Some of them ask their customers to pay in cash, to avoid paying bank fees for receiving card payments, he said.

Vinh said some merchants want to keep their revenues secret, and therefore do not encourage non cash payments.

With over 1.3 million ATM cards and 150,000 international credit cards, Techcombak sees payments of only VND300-400 billion ($14.3-19 million) via its cards a month, much lower than the trillions of dong withdrawn using them, he said.

State support

Some cardholders do not know how card payments work; some others are afraid of risks when using the service.

Vinh said the staff of many merchandisers are not trained in using the POS network, so they often face problems and customers have trouble making payments.

Many local customers prefer to make cash payment as merchants ask them to pay extra if they use a card. A shop assistant at the JoJo Maxx garment shop in Ba Trieu Street said her shop charges a fee of 1.75 percent of the value of products if payment is made by card.

"Obviously, I will pay with cash. I do not want to pay more just to use a card," said Le Thu Huong, a university teacher in Hanoi, as she waited at the shop's counter to pay for a new coat.

Nguyen Khanh Vinh, manager of supermarket chain Le's Mart, said supermarkets have to pay fees to banks when customers pay with cards, so their profits may be cut. "The fees look very low, but with the total card payment worth billions of dong, it is also a significant figure."

However, it was only a small number of his customers that paid for their purchases with cards, he said. Among his outlets, the one in Vincom Tower record the largest payment via cards, accounting for 20 percent of its total sales.

The POS of many banks are not connected, so cards issued by many banks cannot be accepted in the supermarket. If more POS are to be installed, they will take more room at the cash counters, impeding activities there, he said.

Vinh of Techcombank said banks make big investments in ATM and POS systems, so they could not give free card payment services. The fees that banks charge their customers are reasonable, he said.

According to contracts between businesses accepting card payments and banks, the former have to pay about 1 percent of the total payments via bank cards, and 2-3 percent of that via international credit cards. The fees are used mainly to pay international card institutions and recoup investment in infrastructure.

He said the state should take measures to increase non-cash payment, aiming to better monitor tax collection, and support banks who increase investment in improving their payment services.

Vinh said that payment via cards among Techcomback's customers was now three times more than in previous years. The figure rose after the bank launched promotions for customers using card services, he said.

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