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ATM fee collection plan not applauded
The plan by the Vietnam Card Association to collect ATM fees from clients has not been considered a wise move. Experts have even described the plan as reflecting the lack of vision of banks.
Dr Le Tham Duong, Head of the Business Administration Faculty under the HCM City Banking University, said: “No one should think of collecting ATM fees at this moment. This shows the short-sightedness of banks in their development strategies.”
Duong said that banks should consider ATM products as an additional service provided for clients together with main services – credit and investment. If so, banks should not strive to get profit from the service. Banks should even accept losses in ATM service but try to get big profit in other services.
For example, the minimum balance in cardholders’ account is VND100,000, and there are 14mil cards, which means that banks have the minimum sum of money of VND1,400bil, a cheap and stable capital source for banks. If banks loan this sum of money, they will get bigger interest rates than the interest rates they have to pay to cardholders.
Dr Duong also warned that the ATM fee will not encourage people to make payments via banks.
Mai Thi Trinh, a staff of The gioi di dong Joint-stock Company, said that she will not use ATMs if banks collect VND1,000 per cash withdrawal and she can only withdrawn VND2mil at maximum per transaction.
“If banks collect ATM fees, I will go to the bank to withdraw all the money I have once a month,” Trinh said.
Nguyen Van Tin, a 1st year student at HCM City National University, said that currently, he withdraws VND200,000 per transaction only, because he wants to keep money safe. However, if banks collect ATM fees, he will also withdraw all his money once a month.
Dr Tran Hoang Ngan, Deputy Head of the HCM City Economics University, said that banks should consider thoroughly before collecting fees. He said that clients will turn their backs on banks which collect fees but cannot provide high-quality services.
Meanwhile, East Asia Bank (EAB) said that it does not want to collect ATM fees as of January 1, 2009 as suggested by the card association.
Tran Phuong Binh, General Director of EAB, said that the plan on fee collection needs to be implemented step by step.
EAB now has 2.5mil ATM cards. If every card holder makes one withdrawal a month, the bank will get VND2.5bil a month.
The sum is not big, but not small for the bank. However, if EAB collects fees, low-income earners will not keep their money in accounts anymore. They will withdraw money once in order to avoid paying fees.
In fact, EAB collects ATM fees, but it does not intend to collect fees from cash withdrawal transactions, only from higher grade services.
“In Vietnam, where cash is still preferred in payment, if we collect ATM fees, clients will keep cash instead of keeping money in accounts,” Binh said.
Tien phong, DTCK
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