According to the State Bank of Vietnam, by the end of the third quarter, commercial banks had issued 147 million payment cards of different kinds. 

However, according to the Vietnam Card Association, about 50 million cards have been abandoned or inactivated, which means that about 100 million cards are in use.

Of the 100 million cards, 80 percent are magnetic, which are believed to have low security level. In developed countries, magnetic cards are no longer in use and have been replaced with chip cards.

Le Huynh Ha from Vietcombank HCMC, said that over 4 million Vietcombank cards need to be converted into chip cards.

With the standards of domestic chip cards set by the State Bank, commercial banks can order chip card products from overseas as the standards are equal to EVM standards of international chip cards.

The banks need to upgrade technology, calculate costs, register and inform customers about the conversion process that fits Vietnamese conditions.

While there is no technological problem in the process, the high cost of the conversion campaigns will be a headache to banks. According to Vietcombank, the minimum cost is VND70,000 for one chip card.

A senior executive of Eximbank said the fear was that it would be costly to convert 2 million cards of the bank into chip cards.

“With the average cost of VND70,000, it would cost VND5.6 trillion to convert 80 million cards existing in the banking system into chip cards.

Sacombank said it had finished the technology upgrade for the conversion from magnetic to chip cards. In the immediate time, the conversion will be applied to expired magnetic cards. 

ACB Bank believes that chip cards will help increase the number of transactions at Points of Sale. The chip cards have a high level of security equal to international credit cards. Once banks have higher revenue from POS, they will have money to partially cover the expenses for card conversion.

An executive of Sacombank said with 3 million cards to be converted, the bank will have to spend trillions of dong, so it needs more time to think about whether to collect a fee from cardholders. 

“The cardholders who are loyal clients who regularly make transactions with cards may be exempted from a conversion fee,” he said.

It is expected that 75 percent of ATMs and 100 percent of POS will have to accept domestic chip cards by the end of 2019.

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