VietNamNet Bridge - Small banks and finance companies are now rushing to issue credit cards and compete with big banks as they believe the development potential of the credit card market remains great.

The total number of cards issued by the end of the second quarter of 2018 had reached 141.6 million, an increase of 7.3 percent compared with the beginning of the year, according to the State Bank of Vietnam.

The number of cards issued has been increasing steadily in recent years, as non-cash payment methods are becoming more popular.

Of the 141 million issued cards, more than 90 percent are debit cards, while other types of cards, including credit cards, account for a very small proportion. 

Meanwhile, Vietnam has over 70 million adults, and income and spending growth rates among the highest levels in the region.

As for banks, developing credit cards can bring higher profits thanks to the higher interest rates than normal lending. They also have earnings from different types of fees that cardholders have to pay, from annual fees to cash withdrawal fees.

However, the market is now controlled by Vietcombank, BIDV, VietinBank, Sacombank and Techcombank.

Vietcombank in 2017 stated that it still led the card market with the number of international credit cards up by 1.35 percent and the number of card acceptance units up by 11,773 units.

Nevertheless, analysts predict that the current market may change as more and more small banks, foreign banks, domestic finance companies and foreign finance institutions  have jumped into the market, triggering a new battle for card market share.

Shinhan Bank is striving for a position among top three credit card issuers in the next three years. FE Credit and Home Credit, the two consumer lending companies, are stepping up card issuance by offering a lot of preferences. 

Lotte Card, through the takeover of Techcombank Finance, is the first South Korean finance company to issue credit cards in Vietnam.

With the appearance of more issuers, credit cards are now more popular in Vietnam. A person with the monthly income of VND7-8 million can obtain a credit card with a spending limit of up to tens of millions of dong.

The stiff competition among card issuers has brought benefits to users. While the service fees for debit cards remain the same at different banks, while the service fee for credit cards are different.

The big banks including VIetcombank and BIDV have the lowest annual fees in the market, about VND100,000 for standard cards. Private banks collect VND300,000-400,000 and foreign banks up to millions of dong.

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