Vietnamese Banks Encouraged to Use High-Technology Products

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Dec. 10 – Presenting an opportunity for investors, Vietnam’s banking industry seeks to apply more advanced information technology and security infrastructure in the near future, the government said on Thursday.

“Developing more useful banking services, widening the use of the new Point of Sale (POS) for plastic money, and seeking more idle capital in rural areas are new trends in the banking industry,” Governor of the State Bank of Vietnam Nguyen Van Glau said at the opening ceremony of Vietnam’s 2010 annual banking conference in Ho Chi Minh City.

A recent survey conducted by the State Bank of Vietnam’s HCM City branch found that 70 percent of banks said they needed better technology infrastructure to link the POS machine with other partners.

But while banks might support the move to high-tech transactions, other industries may not view the trend as enthusiastically.

“The success of POS would depend mainly on the service owners, especially if they don’t want banks to have records of their sales transactions so as to avoid paying more taxes,” cautioned Bui Quang Tien, director of SBV’s Payment Department.

High POS fees between banks and the cost of promoting the service were also slowing the growth of transactions using the machines.

Despite these disappointments, “Viet Nam’s high growth rate, deeper financial integration, high ratio of youth population, and improved living standards as well as the high ability to use technology will boost POS use in the near future,” Tien concluded optimistically.

Yesterday, the nation’s banking sector took a step towards promoting non-cash payments by connecting the POS system between banks in HCM City, with Hanoi doing the same this past September.

Representatives of several banks said they were paying attention to developing other non-cash payment services like mobile banking, Internet banking and home banking.

Currently, there are 8.6 million ATM cards, 46,000 POS machines and 11,000 ATMs in Vietnam. The issuance of plastic money, including debit and credit cards grew by 150 to 200 percent per year during the 2006-10 period, though growth in transactional amounts performed through the POS system hovered around 5 percent during the same period.