Vietnam banks speed up replacement of magnetic cards

Vietnamese banks are speeding up the process of replacing magnetic cards with chip cards to meet the deadline set by the State Bank of Vietnam (SBV) on March 31, 2021.

Chip cards can be used for payment of various services. Photo: An Phu.

Under a recent circular released by the SBV, banks are required to issue chip cards instead of the  magnetic cards from March 31, 2021. Infact, many banks have already completed the process.

For example, PVcombank completed the change from magnetic cards into EMV (Europay, MasterCard, and Visa) embedded chip card. Vietcombank has so far issued over 1.5 million contactless cards and upgraded 60% of its electronic data capture (EDC) system, 80% of its ATMs are chip-enabled.

Other state-run banks, including Vietinbank and Agribank are stepping up the preparation process in terms of payment infrastructure and technologies to ensure smooth transformation from magnetic to chip cards under the EMV standards.

Since November 9, 2020, SHB stopped issuing magnetic cards and replaced them with chip cards.

To help accelerate the application of chip cards, most banks are offering the switch free of charge, including Vietcombank or Vietinbank.

Statistics from the National Payment Corporation of Vietnam (NAPAS) revealed as of the second quarter of 2020, 26 banks have completed the system authentication process required for the switch.

Expert suggested the change towards chip cards would bring benefits for both banks and customers. NAPAS’s Chairman of board Nguyen Quang Hung said one of the major advantages of chip card is that all data are encrypted, in turn resolving the risk of data theft, known as skimming at ATMs.

Unlike existing magnetic cards, chip cards can be used for payment of various services from transport, insurance, healthcare, among others, while promoting non-cash payment, he noted.