New technology in the digital age: Vietcombank drives contactless card use amid COVID-19
Vietcombank is one of the first and leading banks in Vietnam to issue and support existing cardholders to convert from magnetic stripe to contactless chip cards
A chip card has an embedded microchip that replaces the traditional magnetic stripe used to store and secure information. A microchip is relatively more “intelligent” and tamper-proof than magnetic stripe. It helps reduce fake and fraudulent transactions by allowing only the issuing bank to write and read the data on the card.
Each transaction will have its own authentication code, ensuring that data is not stolen to forge card transactions. At the same time, the card uses contactless near field communication (NFC) technology that does not require the cardholder to swipe the card, but by scanning or waving it in front of the payment device at the cashier.
Chip cards with integrated contactless payment technology have now become popular with consumers and will replace magnetic stripes over time. The product allows customers to transact by tapping or waving the card over the point of sale (POS) device. Customers can use their cards without swiping it on a card reader or to enter the card PIN.
Compared with magnetic stripe cards, contactless chip cards bring many benefits to customers and merchants in terms of fast processing speed, convenience in transactions and card security.
Currently, contactless chip card technology has been widely used in the world, especially in developed countries. In a survey on consumer payment attitudes conducted by international payment company, Visa, up to 40% of Visa card transactions outside of the US are contactless.
In Canada, contactless payments make up 70% of transactions under $40 while in Costa Rica, it is even higher at 80%. Poland is now targeting to become the first country in the world with 100% contactless card payments. While in Russia, usage of the technology is growing 200% annually.
Amid the disruptions and safe management measures necessitated by the COVID-19 epidemic, the use of contactless chip cards has also taken the added significance of disease prevention. It helps to limit the transmission and spread of the virus from physical contacts.
According to the World Health Organization (WHO), the use of contactless chip card plays an important role in controlling and managing the epidemic, it states, “We support the entire growing number of contactless payments in United States and throughout Europe. Cardholders and store owners will soon be able to make purchases quickly and securely, especially without the requirement to enter PIN.”
In Vietnam, the use of contactless chip card technology is also developing in line with global trend. In fact, contactless chip cards have been widely used at many card-accepting merchants such as convenience stores, restaurants, supermarkets or large commercial establishments such as KFC, CGV, Circle K, Coopmart, Vinmart, Big C, Zara, etc. Customers are paying more attention to contactless payments.
According to the Visa survey, contactless payment transactions currently account for about 12% of total card transactions. Sales volumes from banks’ contactless payment transactions are on a positive growth trend, proving that consumers are interested to choose and use this payment method.
Vietcombank customer Thanh Lam from the Hoang Mai district in Hanoi who has been using a contactless chip card for a while, shared, “This contactless payment is very convenient and fast. I just need to tap the card when I shop at the supermarket or buy things. I do not have to count the amount of money or change I need to pay, or to pass the card back and forth from the cashier, or to sign the bill, it saves a lot of time. When I make payment, especially during the epidemic, I don’t have to give the card to the cashier, I don’t have to touch the POS machine to enter the PIN code. Therefore, I feel protected from the disease.”
Vietcombank is leading this market trend towards contactless transactions. It is one of the pioneer banks to promote the wider use of chip cards with contactless technology and to enable one-touch payment for both card issuance and payment. To further encourage usage among Vietcombank cardholders, the bank offers to convert customers with magnetic stripe cards to contactless cards for free. They can do so at Vietcombank’s transaction counters and DigiBank mobile banking app.
To date, Vietcombank has issued and converted over four million contactless chip cards and upgraded over 97% of electronic data capture (EDC) devices to accept chip cards. All of its ATMs now accept chip cards too, making it a leader in providing customers with contactless payments in Vietnam.
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