Magnetic cards are slowly “dead”

There have been many commercial banks issuing domestic chip cards to customers and gradually replacing card-accepting devices. Commercial banks are about to issue new domestic cards that must be chip cards, instead of magnetic cards as currently, to ensure the transition of magnetic cards to chips in 2021. This is the highlight at the project. The draft of amending and supplementing a number of articles of Circular No. 19/2016 on banking card operations is being consulted by the State Bank. Required to open chip card In this draft, the State Bank has given a timeline of March 31, 2021, card issuers must open a new domestic debit card (ATM), which is a domestic chip card, instead of a card. from the current situation, up to 9 months earlier than the previous regulation (December 31, 2021). According to the State Bank’s Drafting Board, the new regulations also aim to prevent the phenomenon that some banks continue to issue magnetic cards to customers, affecting the roadmap for converting domestic chip cards in 2021. At the same time, banks must assign human resources and funding to support customers to convert magnetic cards to chip cards so as not to affect the usage of card customers … According to statistics of the State Bank, by the end of the third quarter of 2020, there were more than 93.78 million domestic cards in circulation, mainly ATM cards. As noted, many commercial banks have implemented the issuance of new ATM cards for cardholders which are purely domestic chip cards. On December 30, the consultant of Vietnam Export Import Commercial Joint Stock Bank (Eximbank) said that customers who need to change ATM card from magnetic card to chip will cost 50,000 VND, while opening a new domestic chip card, the fee for distribution onion is 70,000 dong. At Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV), from October 2020, this bank has switched to issuing a completely new ATM card using chip cards, instead of magnetic cards as before, the fee is 110,000 VND, depending on the card line, card grade … Many other commercial banks such as PVcomBank, VPBank, MB … have also informed customers about the switch to issue new domestic chip ATM cards, replacing magnetic cards. Customers wishing to convert magnetic cards to domestic chip cards are also supported, without affecting the card usage and payment process. Meanwhile, Military Commercial Joint Stock Bank (MB) said it has actively issued chip cards VCCS from May 2020. To date, MB has issued nearly 1 million local VCCS chip cards. To support and encourage customers to convert to chip cards, MB is completely free of charge. In addition, 100% of MB’s payment devices such as ATMs, POS … all accept and comply with the basic standard of domestic chip cards. It is expected that in 2021, this bank will ensure 100% of the issued domestic cards are VCCS chip cards. At Vietnam Prosperity Joint Stock Commercial Bank (VPBank), the issuance of EMV-compliant chip cards to replace domestic cards currently in circulation, Autolink and VPSuper, is also being implemented. From the beginning of 2020, all new ATM cards opened at VPBank are chip cards and banks are encouraging customers to convert magnetic cards to chip cards. During the conversion, the card operation is still going on continuously, stably and safely. According to preliminary statistics of the regulator, up to now, 36 commercial banks have registered to convert magnetic cards to domestic chip cards, the expected number by December 31, 2020 is 13.5 million chip cards. Gradually remove the “junk” tag from the market All commercial banks recognize that converting magnetic cards to domestic chip cards will contribute to improving safety, security and speeding transactions. Because most of the card information theft (skimming) to get money in the customer’s account happened with magnetic ATM card, which has low security. A chip card is a card with a small chip attached to the front of the card according to a standard issued by international card organizations. Chip card is capable of storing and encrypting information with high security. When making payment, the chip card will create a unique and never-repeated transaction code, helping to reduce the risk of fraud, tampering … Talking to the reporter of Nguoi Lao Dong Newspaper, Mr. Nguyen Minh Tam, Deputy General Director of Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank), said that customers should soon switch to chip cards because of higher security and convenience. more convenient in high-limit payment transactions, contactless payment methods can be used … “Since the chip card was issued, there has been almost no fraud or card information disclosure, many The card is safer in transactions, Sacombank will stop accepting card payments after having specific instructions from the management agency “- Mr. Tam said.

With the number of 4.3 million domestic cards in the market, leaders of Sacombank said that the conversion rate of the bank’s magnetic card to chip card is ensuring on schedule as prescribed. It is likely that by the end of 2021, Sacombank will achieve the target. Particularly, the bank’s card acceptance devices and ATMs have reached 100% of the State Bank’s VCCS chip standards from the second quarter of 2019. “We also stopped issuing cards from domestic and switched to 100% opening VCCS chip cards from October 2016. To speed up the transition, it is very necessary to support the State Bank as a manager, strengthening communication to help customers understand the benefits and meaning of the conversion. Currently, magnetic cards are still used on Sacombank’s ATM and POS devices “- Mr. Nguyen Minh Tam said. According to banks, one of the difficulties in the process of converting magnetic cards to domestic chip cards is that some customers have not actively converted their existing ATM cards. Not to mention, a large number of magnetic cards circulating in the market are “junk” cards, cards that have been inactive for a long time … Therefore, the introduction of a specific timeline requires banks to issue new cards. The chip also contributes to the gradual elimination of “junk” ATM cards. “The biggest difficulty of the conversion is depending on the initiative and desire of the cardholder in registering the conversion. The bank encourages customers to convert to ensure safety and experience many other benefits due to the card. The chip brings “- said MB’s representative. An expert in the card field analyzed that the mandatory regulation of banks to stop issuing magnetic cards and switch to chip cards from March 31, 2021 would be more favorable and practical. Because the recovery of magnetic cards circulating in the market, including a large number of inactive ATM cards, is very difficult and expensive to recover … “Those who wish to open a new ATM card will be issued a card. Local chips, thereby encouraging customers to gradually convert from existing cards to chip cards, will be more efficient, “said the expert. Draft revised circular of the State Bank extended the time limit of 100% of ATMs and card acceptance devices complying with chip standards until December 31, 2021 instead of December 31, 2020. State Bank of Vietnam explained that this extension is to match the actual implementation progress on converting devices of banks. Source: https://nld.com.vn/kinh-te/the-tu-dang-dan-bi-khai-tu-20201230214109554.htm