Why is card payment via POS not yet developed?

There are no official statistics on individual customer transactions via ATM and POS, but according to commercial banks, the majority are cash withdrawals, while card payments are... very rare.

Up to this point, the whole Nghe An province has about 355,000 customers opening accounts at credit institutions with an average deposit balance estimated at 3,350 billion VND. Commercial banks have issued about 497,000 cards, including more than 2,000 international cards. The number of ATMs in the area is estimated at 136, 145 EFPOS machines and 115 card acceptance units. Discussing with us about the current difficulties in developing the POS network, the leader of the State Bank of Vietnam Nghe An Branch said: Document No. 3810/NHNN-TT dated May 16, 2011 of the State Bank of Vietnam directed the branches of the State Bank of Vietnam in provinces and cities to deploy interconnection of the POS network and develop card payments via POS. According to the direction in this document, the State Bank branches are required to develop a plan to implement the connection of the POS network; proactively contact and coordinate with card switching companies and commercial banks in the area to implement. However, the branch recognizes that there are difficulties and shortcomings in this issue. That is, the development of the payment network for commercial bank branches in the provinces depends entirely on the goals and plans decided by the commercial bank at the head office. The relationship with card switching companies to upgrade the software must also be implemented uniformly from the head office commercial bank. The State Bank branches in provinces and cities only participate as a focal point to urge implementation and cannot directly coordinate with the card switching unit or the head office of the commercial bank to direct implementation.

Incomplete POS card payment, ATM
just portable wallets.

Meanwhile, the technical infrastructure, specifically the ATM network and the connection of card payment via POS of the banking system is not complete. Currently, although the card payment system of domestic commercial banks has been connected, only 8 commercial banks have participated in connecting the system of card acceptance points in Hanoi and Ho Chi Minh City. This means that if customers use cards of 8 connected banks, they can use them through each other's card swiping machines, while cards of other banks can only be used through POS of that bank.

As for card-accepting units such as supermarkets, stores, shopping malls, hotels, hospitals, etc., they do not like to use POS. It is known that it is not a matter of installation costs because banks install this device for free, but a psychological problem of fear of revenue control and also the reason... income tax evasion. Therefore, currently only units with payment transactions for foreigners (hotels, border gates...) are willing to accept POS installation because foreigners have the habit of using cards. As for the people, cardholders themselves are also afraid to swipe cards because they do not trust the card deduction method, they are afraid of being charged wrongly or having to pay fees... VAT on goods and services and card payment fees have increased shopping costs, so people are not encouraged to pay by card. Because of these shortcomings, ATMs are now considered "giant wallets", mobile for people to withdraw money with many inconveniences.

For those reasons, payment via POS is still very slow. In order to smoothly implement the plan to connect the POS network, the State Bank of Vietnam, Nghe An Branch, recommends that the State Bank of Vietnam study and have direct instructions with the head offices of commercial banks, thereby having specific solutions and uniformly implementing nationwide. On that basis, the State Bank of Vietnam branches in provinces and cities are responsible for urging and directing implementation in the locality.

Thu Huyen