improving payment card service on point of sale (pos) in bank for investment and development of viet nam

ACKNOWLEGEMENT First of all, I would like to thank all of the professors from National Economics University (NEU). Thanks to Program Directors, Coordinators of the program and Teachers who did try their best to provide us valuable knowledge during the MBA course. Through all subjects in this course, I gained and widened a lot of knowledge in general, market economy and business management in particularly. They are very useful for my current work and my future career, especially about economic foundation. I also would like to express special thanks to my thesis supervisors, Associate Professor, Dr. Tran Tho Dat, who provided me with valuable advises, guidance during the time I have done the thesis. I am grateful to my colleges, supervisors and managers of Bank for Investment and Development of Viet Nam for their valuable supports and providing me data during the preparation of this Thesis. Thanks to all people whom kind enough to grant me an interview or enthusiastically provide me their feedbacks in my surveys. 1 TABLE OF CONTENTS CHAPTER 1 17 INTRODUCTION 17 1.1. Rationale 17 1.2. Research objectives 18 1.3. Research questions 18 1.4. Research methodology 18 1.4.1. Research process 18 1.4.2. Data collection method 19 Secondary data: Secondary data collected via internal source of BIDV. They were collected mainly base on BIDV’s report, regulations and official documents of BIDV, internet and newspapers within 4 years from 2007 to 2010 and used as the data for a desk research. Secondary data is use to analyze the current situation of payment card service on POS in BIDV 19 Primary data: Qualitative and quantitative methods were collected to get the information. Qualitative data is collected through in-depth interview with very important person (VIP) and managers. This data helps researcher to understand clearly about their needs and expectations when they make payment by card. Moreover, the researcher would like to know about their point of view when they use BIDV payment card service, find out their expectations. 19 1.4.3. Analyzing data 20 1.5. Research scope 21 1.6. Research structure 21 CHAPTER 2 22 THEORETICAL BACKGROUND 22 ON CARD AND PAYMENT CARD ON POS 22 2.1. History and development of ATM card and payment card on POS 22 2.2. Definition, classification, feature and transaction processing 24 2.2.1. Definitions 24 2.2.2. Classification type of transactions on POS 25 2.2.3. Feature and transaction processing 26 2 2.3. Member taking part in payment card on POS 26 2.4. Payment card on POS general framework 27 28 Source: Report on Brazilian card industry 28 2.5. Role and benefit of cards and payment card on POS 28 2.5.1. Benefit of card and payment card to the economy 28 2.5.2. Benefit of cards and payment card on POS to customers 29 2.5.3. Benefit of cards and payment card on POS to merchants 29 2.6. Factors affecting to payment card service on POS 30 2.6.1. Habit of using cash in the economy 30 2.6.2. The guidelines and policies government for payment card service on POS 31 2.6.3. The development of science technology 31 2.6.4. The infrastructures for using payment card 32 2.7. Rules for a good payment card service on POS 32 2.7.1. Security service 32 2.7.2. Convenient service 33 2.7.3. Speed processing: 33 2.8. Activities of Payment card service on POS 33 CURRENT SITUATION OF PAYMENT CARD SERVICE ON POS IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM 36 3.1. Introduction of BIDV 36 3.1.1. General information of BIDV 36 3.1.2. Fields of operation 36 3.1.3. Human Resources and Network: 36 3.1.4. Customers: 37 3.1.5. Technology: 37 3.1.6. Commitment: 38 3.1.7. Business reputation of BIDV: 38 3.2. Overview of payment card services 39 3.2.1. Overview of payment card service on POS in Viet Nam 39 3.2.2. Overview of payment card service in BIDV 40 3.3. Current situation of payment card service on POS in BIDV 42 3.3.1. Type of card accepted at BIDV POS 42 3.3.2. Function 42 3 3.3.3. Type of fee and ratio fee 42 3.3.4. Criterion to become BIDV merchant 43 3.3.5. Process to establish a merchant 45 3.3.6. Process of payment card 46 3.4. Evaluation of current BIDV POS services 49 3.4.1. Evaluation of transactions on BIDV POS 50 3.4.2. Evaluation of BIDV POS terminal 52 3.4.3. Evaluation of BIDV merchants 54 3.4.4. Evaluation of solving problem 56 3.4.5. Evaluation of customer’s satisfactions 57 3.4.6. Evaluation of revenue and fee on POS 58 3.5. Gap between current POS services and required services. 62 3.6. Limitations and reasons 64 3.6.1. Limitation 64 3.6.2. Reasons 65 CHAPTER 4 66 SOLUTIONS TO IMPROVE PAYMENT 66 CARD SERVICE ON POS IN BIDV 66 4.1. Solutions for marketing of card and payment card 66 4.1.1. Promoting advertisement of card and payment card 66 4.1.2. Identifying market segment and targets 67 4.1.3. Build brand name of BIDV 68 4.2.2. Having a suitable promotion and customer care program 69 4.3. Increasing investment for technical equipment and system for payment 70 4.3.1. Investing and developing technology on POS services 70 4.4. Pay attention to develop human resource 70 4.4.1. Reorganize Card department at branch more suitable 70 4.4.2. Developing human resources for card services 71 4.5. Enhance utility of card and POS services 71 4.5.1. Enhance research activities and develop card product 71 4.5.2. Connect between other banks and financial organization 72 4.6. Solutions for preventing and manager risk on payment card 72 4.6.1. Enhance risk management activities and prevent risk 72 4.6.2 Make a choice reputable merchant 74 4.6.3. Limit the risk of payment card service on POS 74 4 CONCLUSION 76 5 ABBREVIATIONS ATM: Automatic Teller Machine BIDV: Bank for Investment and Development of Vietnam EDC: Electronic data capture HR: Human resource MOTO: Mail order/ Telephone Order POS: Point of Sale PIN: Personal identification number VCB: Joint stock commercial bank for foreign trade of Viet Nam 6 LIST OF TABLES CHAPTER 1 INTRODUCTION 1.1. Rationale 17 1.2. Research objectives 18 1.3. Research questions 18 1.4. Research methodology 18 1.4.1. Research process 18 1.4.2. Data collection method 19 Secondary data: Secondary data collected via internal source of BIDV. They were collected mainly base on BIDV’s report, regulations and official documents of BIDV, internet and newspapers within 4 years from 2007 to 2010 and used as the data for a desk research. Secondary data is use to analyze the current situation of payment card service on POS in BIDV Primary data: Qualitative and quantitative methods were collected to get the information. Qualitative data is collected through in-depth interview with very important person (VIP) and managers. This data helps researcher to understand clearly about their needs and expectations when they make payment by card. Moreover, the researcher would like to know about their point of view when they use BIDV payment card service, find out their expectations 1.4.3. Analyzing data 20 1.5. Research scope 21 1.6. Research structure 21 CHAPTER 2 THEORETICAL BACKGROUND ON CARD AND PAYMENT CARD ON POS 2.1. History and development of ATM card and payment card on POS 22 2.2. Definition, classification, feature and transaction processing 24 2.2.1. Definitions 24 2.2.2. Classification type of transactions on POS 25 2.2.3. Feature and transaction processing 26 7 2.3. Member taking part in payment card on POS 26 2.4. Payment card on POS general framework 27 28 Source: Report on Brazilian card industry 28 2.5. Role and benefit of cards and payment card on POS 28 2.5.1. Benefit of card and payment card to the economy 28 2.5.2. Benefit of cards and payment card on POS to customers 29 2.5.3. Benefit of cards and payment card on POS to merchants 29 2.6. Factors affecting to payment card service on POS 30 2.6.1. Habit of using cash in the economy 30 2.6.2. The guidelines and policies government for payment card service on POS 31 2.6.3. The development of science technology 31 2.6.4. The infrastructures for using payment card 32 2.7. Rules for a good payment card service on POS 32 2.7.1. Security service 32 2.7.2. Convenient service 33 2.7.3. Speed processing: 33 2.8. Activities of Payment card service on POS 33 CURRENT SITUATION OF PAYMENT CARD SERVICE ON POS IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM 3.1. Introduction of BIDV 36 3.1.1. General information of BIDV 36 3.1.2. Fields of operation 36 3.1.3. Human Resources and Network: 36 3.1.4. Customers: 37 3.1.5. Technology: 37 3.1.6. Commitment: 38 3.1.7. Business reputation of BIDV: 38 3.2. Overview of payment card services 39 3.2.1. Overview of payment card service on POS in Viet Nam 39 3.2.2. Overview of payment card service in BIDV 40 3.3. Current situation of payment card service on POS in BIDV 42 3.3.1. Type of card accepted at BIDV POS 42 3.3.2. Function 42 8 3.3.3. Type of fee and ratio fee 42 3.3.4. Criterion to become BIDV merchant 43 3.3.5. Process to establish a merchant 45 3.3.6. Process of payment card 46 3.4. Evaluation of current BIDV POS services 49 3.4.1. Evaluation of transactions on BIDV POS 50 3.4.2. Evaluation of BIDV POS terminal 52 3.4.3. Evaluation of BIDV merchants 54 3.4.4. Evaluation of solving problem 56 3.4.5. Evaluation of customer’s satisfactions 57 3.4.6. Evaluation of revenue and fee on POS 58 3.5. Gap between current POS services and required services 62 3.6. Limitations and reasons 64 3.6.1. Limitation 64 3.6.2. Reasons 65 CHAPTER 4 CHAPTER 4 SOLUTIONS TO IMPROVE PAYMENT SOLUTIONS TO IMPROVE PAYMENT CARD SERVICE ON POS IN BIDV CARD SERVICE ON POS IN BIDV 4.1. Solutions for marketing of card and payment card 66 4.1.1. Promoting advertisement of card and payment card 66 4.1.2. Identifying market segment and targets 67 4.1.3. Build brand name of BIDV 68 4.2.2. Having a suitable promotion and customer care program 69 4.3. Increasing investment for technical equipment and system for payment 70 4.3.1. Investing and developing technology on POS services 70 4.4. Pay attention to develop human resource 70 4.4.1. Reorganize Card department at branch more suitable 70 4.4.2. Developing human resources for card services 71 4.5. Enhance utility of card and POS services 71 4.5.1. Enhance research activities and develop card product 71 4.5.2. Connect between other banks and financial organization 72 9 4.6. Solutions for preventing and manager risk on payment card 72 4.6.1. Enhance risk management activities and prevent risk 72 4.6.2 Make a choice reputable merchant 74 4.6.3. Limit the risk of payment card service on POS 74 CONCLUSION CONCLUSION 10 [...]... other financial organizations, banks and means of media, etc In some recent years, several banks in Vietnam have concentrated on developing card services and payment cards on POS Bank for Investment and Development of Viet Nam (BIDV) is one of the banks which pay attention to developing card services and payment card service on POS However, its quantities and qualities of payment card service on POS in. .. card has been attracted by customer within 10 years ago Using cash to buy goods and services is one of the habits of Vietnamese for a long time and payment card service on POS is concentrated in big city, industrial zone…So this kind of service is still not popular with Vietnamese people On the other hand, in Viet Nam, living standard and income of people is lower in comparison with other country in. .. card 18 service on POS in BIDV, I decide to follow this research topic Improving payment card service on Point of Sale (POS) in Bank for Investment and Development of Viet Nam 1.2 Research objectives In order to solve the research problem above, the thesis focused on clarifying the objectives as below:  Exploring expectation of merchants and customers of using card and card services  Analyzing current... Report on Brazilian card industry 28 2.5 Role and benefit of cards and payment card on POS 28 2.5.1 Benefit of card and payment card to the economy 28 2.5.2 Benefit of cards and payment card on POS to customers .29 2.5.3 Benefit of cards and payment card on POS to merchants 29 2.6 Factors affecting to payment card service on POS 30 2.6.1 Habit of using cash in the economy ... ON CARD AND PAYMENT CARD ON POS 2.1 History and development of ATM card and payment card on POS .22 2.2 Definition, classification, feature and transaction processing .24 2.2.1 Definitions .24 2.2.2 Classification type of transactions on POS .25 12 2.2.3 Feature and transaction processing 26 2.3 Member taking part in payment card on POS .26 2.4 Payment card on. .. Analyzing current payment card services on POS in BIDV  Giving out solutions and suggestions to improve payment card service on POS in BIDV 1.3 Research questions Related to this thesis, I will concentrate on answering some following questions:  What are expectations of merchants and customers of using card and card services?  What is current situation of payment card service on POS in BIDV?  Is there... situation of payment card service on POS in BIDV Chapter four: Solutions to improve payment card service on POS in BIDV 22 CHAPTER 2 THEORETICAL BACKGROUND ON CARD AND PAYMENT CARD ON POS In this chapter, the author presents key concepts and relevant theory regarding card and payment card on POS All theories are quoted from MasterCard international organization and Visa international organization 2.1... service in BIDV is much less than other banks More and more banks have concentrated on developing card services including POS services and merchant network On the other hand, retail banking service including card services play an important role in banking activities It is one of a channel bring a lot of benefit to the banks and make a close image of the bank with customers For purpose of having a greater... acquirer’s request In case of devices’ loss and damage due to Merchant’s fault, Merchant shall indemnify as per acquirer’s regulations 36 CHAPTER 3 CURRENT SITUATION OF PAYMENT CARD SERVICE ON POS IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM 3.1 Introduction of BIDV 3.1.1 General information of BIDV Founded on 04/26/1957, BIDV is the oldest Commercial Bank in Vietnam As a long-established bank, BIDV... considered to be the leading banks in Viet Nam Thus, developing and improving the payment card service on POS to catch up with the development of the world, to meet the needs of markets and customers are an important tasks for Vietnamese banks in general and BIDV in particular I, myself, have worked in BIDV Card center for over 2 years With the hope of performing a research relating to the payment card . Activities of Payment card service on POS 33 CURRENT SITUATION OF PAYMENT CARD SERVICE ON POS IN BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM 36 3.1. Introduction of BIDV 36 3.1.1. General information. etc. In some recent years, several banks in Vietnam have concentrated on developing card services and payment cards on POS. Bank for Investment and Development of Viet Nam (BIDV) is one of the banks. Overview of payment card services 39 3.2.1. Overview of payment card service on POS in Viet Nam 39 3.2.2. Overview of payment card service in BIDV 40 3.3. Current situation of payment card service on