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Banks to increase ATM cash withdrawal fee
As of June, members of the Card Society under the Vietnam Banking Association will increase the fee they charge for every cash withdrawal at other banks’ ATMs from VND3.300 to 5.500.
The Card Society said it would also ask the State Bank of Vietnam (SBV) to allow a member bank to charge a fee for cash withdrawal at its own ATMs.
SBV has three times rejected this proposal.
Nguyen Thu Ha, Chairwoman of the Card Society, said banks had to increase the cash withdrawal fee at other banks’ ATMs to help pay for the very expensive cost of operating all ATMs.
This cost has been increasing since ATMs have been repeatedly attacked and banks have thus had to invest more on security, Ha said.
She said in fact, several banks increased the fee to VND5.500 as early as at the end of last year and customers didn’t seem to object.
As for allowing a bank to charge a fee for cash withdrawal at its own ATMs, Ha said this was necessary since banks now don’t have any source of revenues to pay for the cost of operating ATMs.
The money in customers’ accounts is simply put back into ATMs so it doesn’t generate any profit.
The director of a joint stock bank’s card center agreed. He said Vietnamese customers are yet to have the habit to use their debit cards for transactions and often withdraw cash as soon as it is available in their accounts.
In addition, saving interest rates are now high as 12 percent per year so most are putting their idle money in savings, not debit accounts.
As a result, banks with an average ATM network often have to keep at least VND400 million in ATMs without generating any profit, and the figure for those operating thousands of ATMs is as much as VND600 billion.
Banks said increasing the cash withdrawal fee at other banks’ ATMs would also encourage smaller banks to operate their own ATMs, rather than rely on big banks’, if they don’t want to lose customers.
According to figures released at the recent annual 2011 Card Society conference by Dang Cong Hoan, director of Techcombank’s card center, 6 major banks (Agribank, Vietinbank, Vietcombank, Dong A, BIDV, and Techcombank) are now operating 8.200 ATMs or 70 percent of all ATMs on the market.
Many banks issue cards but don’t have their own ATMs, putting an incredible burden on big banks’ ATMs, each of which has to serve up to 2.700 account holders, Hoan said.
That means the more ATMs a major bank operates, the bigger it loses, especially because 95 percent of debit card users use their cards to withdraw cash.
Hoan also suggested the number of debit card issued by a bank should be proportionate to the number of its ATMs to reduce the burden on major banks.
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