The National Payment Corporation of Vietnam (Napas) last week said it will work with seven banks to introduce domestic credit chip cards with unified standards to limit cash payments and tackle black credit.

The domestic credit chip cards are expected to be officially launched this week. The seven banks include Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank), Ban Viet Joint Stock Commercial Bank (VCCB), Asia Commercial Bank (ACB), HCM City Housing Development Commercial Joint Stock Bank (HDB), Bao Viet Bank (BVB), Sai Gon Thuong Tin (Sacombank) and Vietnam Thuong Tin (Vietbank).

Previously, four State-owned commercial banks issued domestic credit cards but the issuance was temporarily halted due to inefficient operation. Some joint-stock banks already issued this type of card but without unified technical standards.

Nguyen Quang Minh, Napas’ deputy director, said the new domestic credit cards will be accepted throughout the networks of all banks while the previously-issued ones had limited acceptance.

“In developed countries, domestic credit cards are very common,” Minh said. “That banks will join with Napas to issue domestic credit cards will significantly contribute to limiting cash payments and provide more options for consumer credit to prevent black credit.”

The domestic credit chip cards has high security in accordance with the State Bank of Vietnam’s standards and EMV standards – a security technology used worldwide for chip card payments and acceptance devices – originally developed by Europay, MasterCard and Visa, he said.

Cardholders will not have to pay fees for transactions with an interest-free period of up to 55 days compared to the typical 45 days. The acceptance points will have to pay fees of about 1.1-1.3% of the transaction values, lower than other credit cards.

The fees for cash withdrawal would be about 1-2% of the transaction value (a minimum of VND10,000-20,000 per transaction), also much lower than the fee of about 4% of other international credit cards.

Statistics from the Vietnam Bank Card Association showed that operating domestic credit cards saw a decrease of 10% in 2017-20 and new issuances fell by 36%.

However, the total transaction value of existing domestic cards increased by 25% in the period.