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Vietnam’s credit card market: much potential, many absurdities
Vietnam is considered a credit card market with great potential which is big enough for everyone.
Credit card, the big cake
According to Visa International, only 88,000 of 85mil people in Vietnam (1%) are using Visa credit cards with the transaction turnover of $115mil. Meanwhile, the percentages of populations using Visa cards are much higher in other countries: 68.5% in Singapore, 10.6% in Thailand, 20.3% in Malaysia.
Phung Duy Khuong, Deputy General Director of East Asia Bank (EAB), said that a lot of people still think that credit cards are only for high society and those who frequently travel abroad. In fact, credit cards are for everyone.
Khuong said that EAB’s clients who have the monthly incomes of VND4mil and up will be provided cards with the spending limit of up to VND150mil with the interest rate of 0% for 45 days.
He said that he believes in the development of the international card market, even when there are more cards from more banks-issuers. With only 1% of the population using credit cards, the potential of the market proves to be very big.
EAB expects to issue 400,000 credit cards by the end of 2008.
The cake big enough for everyone
ANZ and HSBC are well known as banks that issue international credit cards. Both the banks have high technology and a lot of experience in international and domestic credit cards.
In fact, domestic banks also issue credit cards. For example, Vietcombank began issuing MasterCard in 1996. After 10 years of development, the international card market now has 10 banks-issuers, including Vietcombank, ACB, ANZ, Eximbank, EAB and HSBC, which had issued 420,000 cards by the end of 2007. There are three main brand name cards, Visa, MasterCard and American Express.
According to Tu Anh, General Director of SmartLink Card Service Company, the card market growth rate remains very modest. Anh said that the conditions for getting credit cards remain difficult as there is not a personal database in Vietnam that serves the providing of credit. This has led to the paradox that those who can meet the conditions to use credit cards do not have a high demand for credit, while those who have a credit demand cannot get credit cards, and have to access credit with mortgaged assets.
Anh also said that banks still do not have effective marketing solutions, and that most Vietnamese people still prefer cash to cards.
Tu Anh said that the credit card market will draw the special attention of foreign banks in the coming time.
VNN
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