Developing card services at joint stock commercial bank for investment and development of vietnam – transaction center branch 1

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - NGUYỄN THỊ KIM ANH DEVELOPING CARD SERVICES AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM TRANSACTION CENTER BRANCH PHÁT TRIỂN DỊCH VỤ THẺ TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH SỞ GIAO DỊCH LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2020 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - NGUYỄN THỊ KIM ANH DEVELOPING CARD SERVICES AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM TRANSACTION CENTER BRANCH PHÁT TRIỂN DỊCH VỤ THẺ TẠI NGÂN HÀNG TMCP ĐẦU TƯ VÀ PHÁT TRIỂN VIỆT NAM – CHI NHÁNH SỞ GIAO DỊCH Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS PHẠM ĐỨC HIẾU HÀ NỘI - 2020 ACKNOWLEDGMENTS First of all, I would like to express my great gratitude to Ass.Prof.Dr Pham Duc Hieu for his valuable instructions, criticism and corrections during the development of the study Without his excellent suggestions and constant encouragement, this thesis would have never have been accomplished My sincere thanks and gratitude are extended to all teachers of the Department of Business & Management for their help and guidance during the course I also would like to thank the Management, all of my colleagues at BIDV Transaction Center Branch for their support in my work Last but not least, I record my deepest gratitude and thanks to my family for their endless love, great encouragement and support that helped me overcome the difficulties during the study Sincere thanks! i DECLARATION ON HONOUR I hereby declare that this is my own study under the supervision of Ass.Prof.Dr Pham Duc HIeu The disclosures are true and correct The findings herein have not been ever disclosed in any other studies Author Nguyen Thi Kim Anh ii TABLE OF CONTENTS ACKNOWLEDGMENTS i DECLARATION ON HONOUR ii LIST OF FIGURES, CHARTS & TABLES vi BACKGROUND .1 CHAPTER LITERATURE REVIEW ON CARD SERVICE OF COMMERCIAL BANKS 1.1 Overview about the Commercial Banks 1.1.1 Concept and characteristics of Commercial Banks 1.1.2 Main activities of commercial banks 1.2 Card service of commercial banks .7 1.2.1 Overview about card service 1.2.2 Develop card service of Commercial Banks .18 1.3 Affecting factors of card service development 25 1.3.1 Subjective factors 25 1.3.2 Objective factors 26 CHAPTER EXISTING CONDITIONS OF CARD SERVICES AT JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF VIETNAM - TRANSACTION CENTER BRANCH 28 2.1 Overview about BIDV - Transaction Center Branch 28 2.1.1 History of development .28 2.1.2 Organizational structure and management apparatus .30 2.2.3 Overview about business activities .31 2.2 Existing conditions of card service at BIDV - Transaction Center Branch 35 2.2.1 Existing conditions of card service through the Branch’s statistics 35 2.3 Evaluation on card service at BIDV - Transaction Center Branch 69 2.3.1 Achievements in the Branch’s card service 69 2.3.2 Restrictions and root causes .70 iii CHAPTER SOLUTION ON CARD SERVICE DEVELOPMENT AT BIDV TRANSACTION CENTER BRANCH 77 3.1 Future card service development orientation of Transaction Center Branch 77 3.2 Solution to develop card service at Transaction Center Branch .79 3.2.1 Strengthen marketing, advertisement and introduction of card service at the Branch 79 3.2.2 Actively develop and take care of ATMs 80 3.2.3 Enhance card product development at the Branch: 80 3.2.4 Improve the employee quality: 82 3.2.5 Complete the customer care policy: 83 3.2.6 Expand the merchant network: 83 3.2.7 Boost up opening personal account: 84 3.2.8 Enhance card-related criminal prevention 85 3.3 Some recommendations .86 3.3.1 Joint Stock Commercial Bank for Investment and Development of Vietnam 86 3.3.2 Bank Card Association .89 3.3.3 The Government 90 3.3.4 The State Bank of Vietnam (SBV): 92 CONCLUSIONS .94 LIST OF REFERENCES 95 iv LIST OF ABBREVIATIONS No Abbreviations Description ACB Asia Commercial Joint Stock Bank ATM Automated Teller Machine BIDV Joint Stock Commercial Bank for Investment and Development of Vietnam EDC Electronic Data Capture Bank Bank SBV State Bank of Vietnam CB Commercial bank POS Point Of Sale VCB Joint Stock Commercial Bank for Foreign Trade of Vietnam 10 ICS International Card Scheme 11 IB Issuing Bank 12 Acq Acquirer 13 Banknetvn Viet Nam National Financial Switching Joint Stock Company 14 Smartlink Smartlink Card Services Joint Stock Company v LIST OF TABLES Table 2.1: The Branch’s net service income items as of 31 December 2017 34 Table 2.2: Summary of card transaction limit in ATMs 37 Table 2.3: Comparison of BIDV and ACB cards .40 Table 2.4: Number of the Branch’s new cards by years 46 Table 2.5: Number of the Branch’s new cards by years 48 Table 2.6 - BIDV positions in domestic debit card market 52 Table 2.7 - BIDV positions in credit card market .53 Table 2.8 - BIDV positions in POS market 54 Table 2.9 - Position of the Branch against BIDV .54 Table 2.10: BIDV card-based transaction revenue of the Branch 55 Table 2.11 Card-based transaction revenue via BIDV Transaction Center Branch’s ATMs and POS: 57 Table 2.12 Card service charge collection in 2015- 2017: 59 Table 2.13 Card service charge structure in the period 2015- 2017: .62 Table 2.14 2017 net income structure of the Branch's retail banking service 64 Table 2.15 Profit from card service 65 vi LIST OF FIGURES, CHARTS & TABLES Chart 1.1: Card issuing operation process 13 Chart 1.2: Operating procedure on card payment .14 Chart 2.1: Organizational structure of BIDV - Transaction Center Branch 30 Figure 2.1: Deposit service growth of the Transaction Center in the period of 2015 2017 31 Figure 2.2: Resources structure of the Transaction Center in the period of 2015 - 2017 32 Figure 2.3: Credit growth of the Transaction Center in the period of 2015 - 2017 33 Figure 2.4: Credit quality of the Transaction Center in the period of 2015 - 2017 33 Figure 2.5: Net service income of the Transaction Center in the period of 2015 - 2017 35 Figure 2.6 Number of new cards by years .46 Figure 2.7: Number of the Branch's new increased POSs by years 49 Figure 2.8: POS revenue by years .49 Figure 2.9: Growth rate of International Credit Cards and new POSs in the year 51 Figure 2.10 Growth figure of card service charge collection in the period of 20152017 59 Figure 2.11 Card service charge collection structure in the period 2015- 2017 60 Figure 2.12 Growth figure of card service charge in the period of 2015- 2017 62 Figure 2.13 Card service charge structure in the period 2015- 2017 .63 Figure 2.14 Growth chart of card service charge in the period of 2015- 2017 63 Figure 2.15: 2017 retail service charge collection structure of the Transaction Center .65 Figure 2.16: Card service profit by years 66 Figure 2.17 Comparison chart of card service charge and revenue growth rate in the period of 2015- 2017 66 vii BACKGROUND Necessity of the study: With response to Vietnam development and the world and regional economic integration, banking operations of Vietnam commercial banks are gradually renovated to successfully satisfy the increasingly high demand of the customers, economy and renovation and integration process On the other hand, in the context of increasingly cut-throat competition among commercial banks, to survive and develop, the retail banking services must be developed to expand the market, improve the competitiveness, create the medium and long term key capital resources for the banks, facilitating the diversified banking operations and making the competition position to the new height Moreover, the potential for developing retail banking services is relatively high Through the onsite survey in Vietnam, ANZ Vietnam experts judged that: “Retail market is only on its early stage of development and extremely expansive for any concerned persons” Meanwhile, ACB representative unveiled that over 20% among 90 million of people have bank account; therefore, it is very potential to develop retail banking services It includes one of retail banking offerings is card service Therefore, it is essential to enhance the card service development to facilitate the banking operations Transaction Center Branch - Bank for Investment and Development of Vietnam is established to act as a wholesale banking branch However, when market mechanism is applied to the economy, the Transaction Center Branch operates as a mixed branch which on one hand continues launching the wholesaling banking function and develops the retail banking service on the other hand Aiming at becoming the local leading commercial bank in Vietnam in terms of retail banking services in the period of 2015 - 2018, the past time was recorded with BIDV’s active deployment of actions, solutions and mechanisms to facilitate the retail banking business development However, the retail banking operation’s contribution to the business only makes up 15%, in which card service contributes approximately 10% among Retail Banking services, a relatively low against the position of the biggest branch in the system Therefore, comprehensive policy and efficiency, additionally study the new functions and utilities for the offerings to the highest satisfaction of the customers The key products should be specified to offer big income to concentrate into investment from time to time, concretely: - International Credit Cards: Current, the Branch’s market share on international credit cards is ranked at 7th while the international credit card system and market share of BIDV is ranked at 7th in the market With the purpose of developing the card service in the coming time, it is necessary to sharply strengthen the credit cards, concretely: + Absolutely adhere to the guidelines on developing credit cards to all functions and teams in the Branch Assign tasks to each officer, establish the timely award policies, and motivate the sales task forces + Actively exploit the available customer base having credit relation with the Transaction Center Branch, especially enterprises with relation on BIDV accountbased salary payment, orienting towards employees in the prestigious organizations such as hospitals and schools, etc Depending on characteristics of each unit, the indepth and key marketing plans shall be launched by the Branch Moreover, for the big customers, the comprehensive contracts must be signed to improve the international credit card supply Besides, customer base must be developed in accordance with the principle of “oil slick” to develop prospects on the basis of available customer base + Additionally supplement new card development channel: access to households in the condominium They are characterized by fairly good or more income, clear house and stable property The cards should be issued in moderate limit (VND 10-15 millions) to make payment for the fixed costs at the buildings (service charges, power and water bill, etc.) and other consumption demands - Domestic cards: Strengthen affiliation with other service providers such as: Post offices, traffic, petroleum, big commercial centers, tour agents, etc., to create the cotrademark cards and affiliated cards Thanks to that, benefits shall be offered to the stakeholders The special preferences shall be enjoyed by the customers when 81 payment is made at affiliates such as price reduction, accumulation of bonus score, etc The Bank facilitates the products to access to the affiliates and increases the sales for the affiliates Vice versa, during sales, customer-oriented activities shall be launched by the affiliates by using the bank card for payment, facilitating the bank card service popularization 3.2.4 Improve the employee quality: Payment card field requires good quality human resources to successfully satisfy the requirements on accessibility to new technologies due to high competition and similarity between the enterprise’s products, performance is largely depended on the system operation and processing, market development possibility of the marketing task forces Therefore, human resources development is a very important issue Card service development task force must be supported with high qualification, enthusiasm, creativeness, mastering the new technology Then, good human resources must be well prepared from recruitment Good investment must be conducted for training to ensure that the employee may adopt and adapt as soon as possible for the works and master the technology changes Therefore, proper budget investment must be launched to launch the training activities with high performance such as: Basic courses, in-depth courses, selftraining through the procedures and cross-training document system among the departments and employees Moreover, the training courses on new offerings, improving the necessary sales skills must be held so that all employees of the Branch may understand the background and skills to become a good card sales executive On the other hand, the card operation-related qualification training and improvement must be regularly concerned of the merchants to ensure safety and risk prevention because this is the important focal contact in entire payment procedure The merchants are characterized by: Changed employees, therefore, the new ones are difficult to quickly master the card payment operations Very high risks are arisen, such as: Fraud card, stolen card, misuse operations, insufficient documents, invalid invoice, etc That is why the Bank is recommended to regularly monitor the merchants and organize the training courses on card payment operations and skills and regularly updates the changes during the card payment 82 3.2.5 Complete the customer care policy: Developing the great and stable customer base using banking service is always the top and key objective of the bank in its operation It is required to improve the customer care quality, i.e., the card holders and Merchants, taking the customer care service as the competitive basis, ensuring the timeliness when the customers are required to regular support, update the customer information and be flexible in applying the HO policies for the customers, concretely: Customers in the system may be classified into groups: VIP customers, close customer and normal customer Accordingly, the customer policies are released in accordance with each customer category For example: with VIP customers: It refers to customer category with big outstanding deposit and loans, using many offerings for a long time For this customer category, special attention must be paid to the customer care, differentiation policy by setting up the list of products, price policy and separate manners such as: Customers are issued with VIP card, allowed to transact at luxurious and professional layout The Branch must export the customer information in the system, setup the list of customer, update the customer information to launch the customer care (offering gifts on public holidays, birthday); follow up the customer’s deposits, take note on due date of deposits to apply the policies on encouraging and motivating the customers to maintain the deposit in BIDV (offering the gifts and consulting the proper deposit products) For the merchants: The Branch’s employee must be periodically assigned to the Merchants to inspect and maintain the devices, timely repair the defects to extend the service length and consider whether the device is it effectively used by the Merchants Training instruction must be also offered to the Merchants’ employees on how to use the device, update the fraud card situation, etc., to improve the Merchants’ performance 3.2.6 Expand the merchant network: In order to actually access to the domestic market and strengthen the payment revenue as well as number of issued cards, development is considered to be very essential as judged by merchants Therefore, the merchant network must be 83 quickly expanded by the Branch Currently, only supermarket and restaurant network is assigned with high card acceptance level However, such market is being saturated A supermarket may be arranged with 3-4 POSs of various banks, resulting in waste in investment In order to facilitate the card holders in spending, it is required to strengthen the network development towards both forms that are not traditional in the city such as electronic outlets, fashion outlets, cosmetics and foreign language centers, etc A problem to be specially concerned is that in addition to the expansive development, the in-depth development policy must be also concerned Firstly, it is required to focus on Merchants with high revenue The Bank must take the proper customer policies so that all employees of such Merchants may make payment via only BIDV, not using services of other Banks, ensuring not to further invest but remarkably increase the fee source revenue They should be offered with the preference in other transactions such as preferences in loan and payment activities, etc When the contract is signed with the Merchants, it is possible to reduce to some percent (%) for the card holders of the cards issued by BIDV Then, the Merchants shall be offset and its account shall be credited with all goods and service amount under the cost price; then, the Merchants shall increase the revenue from BIDV card holders and improve the customer base to use BIDV cards and increase the goods purchase power with cheap price When BIDV card is redundantly issued, card is widely known by many people, and its utilities are acknowledged, the Bank shall gradually adjust the price offset for the Merchants and not offset and start collecting the service charges from the Merchants and collect the fees from card holders so that profit is really offered by the Bank's card issuance-payment operations Sharing network with the merchants, BIDV should launch the award programs for the Merchants with high and stable revenue, plus bonus score with the effective Merchants, etc 3.2.7 Boost up opening personal account: Payment transactions are only conducted for the customers with bank accounts Therefore, opening personal account is very important, creating the backbone background for the card payment Some measures must be taken by the Branch: 84 Encourage the customer to open the personal account at the bank This is the prerequisite to make card-based payment via bank For the time being, wide marketing is initiated to the available card holders who are transacting at the Branch about the utilities of owning personal account at the Bank The promotion and preference programs must be launched to further encourage more persons to open the personal accounts at the bank Moreover, it is required to expand the account holders to new ones who not transact with BIDV In order to successfully fulfill this strategy, it is assumed to allocate the items on opening the personal accounts to each employee and function so that everyone shares the same task to further develop the card products Then, the card service development plan may be fulfilled with the set target Normal and continuous operation must be regularly maintained for the personal accounts at the bank Operating service quality and utilities must be ceaselessly improved via the personal accounts Especially, IT division must complete the online BIDV services so that the customers may easily use in the fastest manner 3.2.8 Enhance card-related criminal prevention - In addition to the offered benefits, card service is potential with a series of risks incurred by the bank and its card holders The most visible risks which tend to increase in the recent time are PIN thief and card fraudulence The card holders’ benefits are significantly affected Therefore, in the coming time, more attention should be paid to ensure safety and prevent risks incurred by the card holders by: Instructing customers how to secure PIN such as: Not assign PIN coincident with date of birth, not disclose PIN, not write PIN on the card, require and instruct the card holders how to change PIN upon card receipt, encourage card holders to regularly change PIN, etc Moreover, the ATM cleaning and maintenance team must regularly inspect camera and areas in front of ATMs and beyond keyboards to prevent the hacker from assigning camera to stole the card holders’ PIN and make fraud cards to seize the cash in the card holders’ account - Moreover, risk mitigation measures must be taken during card payment In order to prevent the fraudulence and seizure, the new security measures must be 85 applied such as: Printing card holder photos on the card, using chip card technology (this technology is only applied for VISA credit cards), encoding passwords at high complexity, difficult to detect, etc., Promulgating the card holders about the significance In case the card is lost, the bank must be promptly notified to timely block the card to avoid damages Best secure the account name and login passwords Avoid use public PCs for transactions Purchase in prestigious websites or sales executives Manually enter the website, instead of link to avoid phising Install antivirus, anti- spyware, etc., to prevent the virus from stealing the personal data Be alert with email having fraudulence signs: Notice on awards, invitation on any website, etc., check website link, software downloaded from Internet, etc It may be assigned with malicious code for information thief 3.3 Some recommendations 3.3.1 Joint Stock Commercial Bank for Investment and Development of Vietnam 3.3.1.1 Perfect technology and techniques for card business: With the ever-powerful IT development like now, the Banking technology modernization is an objective trend and urgent demand of the Bank It is one of the decisive factors for the competition successful If any Banks master the advanced technology, such Bank shall successfully compete in the marketplace - Enhance update of server system, backup stations to ensure stable and smooth operation of the system, not only in the normal conditions but also good response in peak hours Upgrade must consider the markets future development trend to ensure to be active when the market is developed and transaction volume is increased Moreover, orient towards standardize the world high-performance technology to successfully ensure the integration, approach and cooperation in payment service supply with international payment organizations - Update, master and develop the payment management system in general and card payment operation in particular Because most of software being used at BIDV in particular and Vietnam banking system in general are provided by foreign countries, it causes problems during use such as: Low mastership (due to qualification and copyright), non-compatibility with the management and economic 86 environment in Vietnam, resulting alternation, calibration with high cost and time consuming due to submitting the inquiry to the provider for update - Further invest into the transmission line system It is assumed to obtain the leased line for ATM system to ensure no circuit block is available like now and ATMs operate stably without unexpected cases such as customer account is debited but cash is not received, yet, etc The Bank should actively work with the telecommunication industry to ensure no interruption and transmission line circuit of ATM system at peak hours Periodic maintenance and repair service must be conducted for the dedicated card devices Smooth coordination and communication are required between the technical and operating functions for troubleshooting Technicians must be well trained about the card service operations to better support the troubleshooting during operation or deployment of new card service products 3.3.1.2 Launch the marketing campaign consistently in entire system In the context of prevailing cash use habit in Vietnam and the local persons not really understand the benefits and utilities offered by the card service, more concern is not successfully attracted Moreover, in BIDV system, the branches often take the service development policies spontaneously and inconsistently between the branches, causing competition among branches in the same area, adversely affecting the bank image Therefore, consistent card product development policies must be consistently taken to enhance the cooperation between the branches, advertise and introduce the product in the mass media effectively to offer the best impression to the card holders The focal contact role of card center must be enhanced in the card service activities to integrate the card product utilities to ever users to expand the prospects 3.3.1.3 Card product research and development and completion: - International Credit Cards: The card holder survey on pending time for card issuance, BIDV should study and launch the solutions to shorten the issuance time and assign the credit cards to the card holders Like ACB, thanks to introduction of onsite quick card issuance system, taking card within 15 minutes, applied in the entire system, the branches and transaction offices have helped ACB to rank the 2nd of international credit card market share in the marketplace 87 The survey on card holder-related promotion/preference program for the card holders, BIDV should continue launching the programs for the consumable and culinary industries such as no-interest hire-purchase credit programs at machine supermarkets, etc., maintain the gift programs in kinds/valuable items, preference/discount for the card holders upon purchase, scoring and converting score into amount to motivate the card holders to issue and use the cards - Study to develop new card products such as: prepaid cards, corporate cards, Gift Cards, Salary Card, etc As far as we concerned, prepaid cards have been developed by ACB from the end of 2010, at the early of 2011, online sales transactions trends by international cards are sharply developed due to its advantages namely: quick, convenient, self-transacting without going to the bank, not proving the foreign currency purposes With such transactions, transactions with prepaid cards are much faster than the debit cards because the card account shall be directly debited with the prepaid card amount Meanwhile, the debit cards must be taken with steps: Debiting the card account, then connecting to the personal account to deal in such account - Domestic debit cards: BIDV should continue studying to give out the jointtrademark cards and affiliated cards such as in the tourism fields: Viettravel, Viet Tourism Company, etc., post office, traffic, education organizations, etc 3.3.1.4 Much closer to the management and direction of policies and mechanisms Currently, management and direction to fulfill the target plan were just initiated by indirect tools such as: target assignment, orientation documents, official dispatch on evaluation without making use of direct tools such as direct involvement into evaluating customer potential and direct contact with the customers and sales to the interest customers Therefore, in the coming time, in order to closely manage and control the card service-related policies and mechanisms with the practice, not being left behind by other banks, HO and the branch must directly meet the customer and work closely with the branch to understand the actual demand of the customer, survey the card service quality to give out the general orientation and direction in the entire system 88 3.3.2 Bank Card Association Vietnam bank card association is established to facilitate the bank to healthily penetrate into the competitive card market In the context of everychanging card market, the competition is much cut-throat and potential with a wide range of risks To successfully develop a healthy card market and conduct card business, the following activities must be further strengthened by Vietnam Card Association Propagandize the card utilities to the public, raise the high awareness of the people about non-cash payment activities Setup a master agreement on pricing policy in card operation, reduce competition by price reduction and free of charge, adversely affecting the bank's card trademark Connect in focus with the International Card Schemes instead of selfperformance by the banks Encourage to expand the card service operations Facilitate the commercial banks to develop the card service, enabling the domestic banks to apply a certain preferences to improve the competitiveness for the foreign banks and apply the strict penalties for the violations to the card operation regulations Enable the commercial banks to establish provisional funds for card operations, general risk management division for the banks under SBV’s Risk Prevention Center Keep the key role in mobilizing the domestic and international investment capital to appraise the investment projects for card services Propose the State to consider to reduce tax rate for such new service, facilitating the commercial banks to reduce price for the card items, encouraging the local persons to involve in card services, accelerate the payment schedule in the card market Regularly organize the card-related training courses for the commercial banks, involve in exchanging experience, improving the qualification and awareness of the bank staff in card business Also, the banks must be supported and instructed in developing the accounting, reporting and inspecting mechanism in accordance 89 with the card operations in accordance with the international practice and the SBV's requirements Introduce and facilitate the commercial banks to collect basic and indepth information and documents on card operations 3.3.3 The Government  Create a stable socio-economic environment The stable socio-economic environment is always the reliable background for every development Card business development is not out of such rules The stable and sustainable socio-economics facilitate to improve the life the local persons, expanding the international relations, modernizing the banking technology, helping the banks, including BIDV, develop the services in general and card service in particular Therefore, measures must be taken by the State to maintain the stability of the politics - socio-economics, proper PCI, develop the industrial, agricultural and service industries, reduce the unemployment rate, increase the actual income of the employees, encouraging the development of banking operations and card business activities,  Facilitate to expand bank-based payment More attention should be paid to develop the non-cash payment forms and expand the bank-based payment by the stakeholders Through the mass media, the State should propagandize systematically to make the local persons to thoroughly understand the bank card nature, i.e., civilized, modern and multipurpose payment form; mobilize the persons to deal with the bank and waive the habits of holding too many cash For the time being, the public officials in the State-owned enterprises, non-profit agencies and non-business entities should be encouraged to open the personal accounts to make account-based salary payment In the future, the State may expand the payment of taxes, power/water bills and tuition fees by non-cash payment forms to save the cost and convenient for macro-economic management  Modernize banking technology Investment and development of technical infrastructure to modernize banking technology is not a personal problem of the banking industry but is included into the master economic development plan of Vietnam Therefore, the State should pay more 90 attention to this field and quickly boost up Vietnam to catch up with other regional and the world countries in terms of banking technology For card field alone, the State should take the policies to encourage the banks to invest into the technology and modern equipment to serve for card issuance and payment such as: - Reduce import tax; facilitate the import of plant and equipment for the banks’ card issuance and payment - Exempt tax for the banks investing into card service within at least years since the bank’s card issuance and payment service is put into operation - In the long run, the State should invest to establish the Plants, manufacturers of plants and equipment or even components to serve for the card issuance and payment service such as: Card forging machine, ATMs and POSs to reduce price, facilitating the banks to self-provide its agents in a complete and expansive manner Moreover, the State should take plan on expanding card production to replace the empty card source to be imported with relatively high costs  Invest into education system Investment into education system is to invest into the human factor development - national strategy It is assumed to develop qualified human resources, satisfying the industrial economy and intellectual economy, especially in the fields that deeply affect entire socio-economic life such as finance - banking Therefore, a macro direction guideline should be released by the State For the card fields, the universities, especially entities with finance and banking departments should be motivated to further expand the special subjects on payment cards, credit cards and retail banking services  Enhance card-related criminal prevention Most of card fraudulence cases in the past were investigated in cooperation with the legal authorities However, the available statistics unveiled that the number of card-related crime is increasingly high with very sophisticated tricks In Vietnam, the legal documents are insufficient and backward The banks’ technical facilities are poor and backward to become the ideal land for the crimes The State should enhance the preparation of legal documents in economics, finance and banking, 91 penalties for the crime activities related to the cards, such as: Production, fraud card consumption, PIN thief, etc 3.3.4 The State Bank of Vietnam (SBV):  Perfect the legal documents on card Currently, Vietnam is only recorded with the Decision No 371/1999 QĐ – NHNN1 of the Governor of the State Bank of Vietnam dated 19 October 1999 on promulgating the Regulations on Bank Card Issuance, Use and Payment This document only provides the general instruction The specific procedures are designed by each bank without general consistency The coming time shall witness further developed card market and cut-throat competition among the banks in this field Therefore, an ordinance on payment card must be released with strict and consistent provisions with the related documents on forex exchange and credit management  Encourage the bank to expand the card operations Commercial banks, including BIDV, should be encouraged to ceaselessly invest into expanding the card service by supporting the domestic banks to develop the card operations to obtain better competitiveness and take strict sanctions for the violations to the card operation regulations  Improve the foreign exchange policy The current foreign exchange management policy species the regulations on card payment currency at Merchants without mentioning the payment limit and card limits promulgated by the domestic banks As a result, the regulations on not allowing to bring over US$5,000 out of the country are promulgated while such limit may be exceeded overseas by the card holder using the international payment cards issued in Vietnam Therefore, specific regulations on payment cards, particularly international credit cards, must be released to well manage the card holder’s card use, prevent the card use for transferring foreign currencies and facilitate the bank’s card development  Develop the card affiliations Banknet refers to a system to help the member banks to connect ATMs, exploit and share the utilities of the internal banks Banks’ Banknet membership 92 shall held concerned card holders in Vietnam to be more convenient in payment via ATMs Instead of only using ATMs at the Issuing Bank, it may be used at all ATMs of Banknet members Therefore, SBV should act as the focal contact to manage the investment to develop the consistent payment system among the banks; organize, manage, inspect and supervise this joint-banking payment system’s operation Card affiliation development may help the banks to successfully pay and handle all domestic cards without passing the ICSs Therefore, it shall reduce the complexity of payment form for domestic internal transactions; accelerate the payment, handling the exchange rate difference, saving costs payable for the ICS Then, the banks shall be facilitated to apply extremely low discount of credit card payment and debit cards for the domestic transactions of the ICSs Accordingly, it may encourage the card use and card acceptance of the card holders and merchants The members may quickly update the information about fraud cards… 93 CONCLUSIONS In the increasingly cut-throat competition from other commercial banks, service development in general and card service in particular are assigned with special significance in income growth and stability Therefore, card service development is essential According to the research purpose, some main findings are archived with the topic “Card service development at Transaction Center Branch - BIDV”, concretely: First, the theoretical issues on card service have been systematized as the reliable background to evaluate the service’s existing conditions such as suggesting some possible solutions and recommendations on card service development in the Branch Second, the in-depth analysis and evaluation on existing conditions of card services at BIDV’s Transaction Center have been conducted by the study Some main findings and shortcomings are also recorded herein Third, according to the literature review as described in Chapter herein, analysis of existing condition presented in Chapter and originating from the Branch’s objectives and orientations, a solution system is proposed to complete conditions on card service development at the Branch Hopefully, with the findings, the card service development shall be successfully facilitated in the Transaction Center in particular and BIDV in general Although great efforts have been made, the analysis, recommendations and solutions given herein are still incomplete and non-perfect The valuable contributions of the teachers, colleagues and friends are highly appreciated Finally, the author would like to extend the sincere thanks to Ass.Prof.Dr Tran Dang Kham for his valuable support to accomplish this study 94 LIST OF REFERENCES The Prime Minister of the Socialist Republic of Vietnam (2006), Decision No 291/2006/QĐ-TTg on approving the Non-Cash Payment Project in the period of 2006 - 2010 in Vietnam The State Bank of Vietnam (1999), the Decision No 371/1999 QĐ – NHNN1 of the Governor of the State Bank of Vietnam dated 19 October 1999 on promulgating the Regulations on Bank Card Issuance, Use and Payment F.Rederic S.Mishkin (2001), Monetary, banking and financial market, Science and Technique Publishing House, Hanoi Peter S.Rose (2004), Commercial bank management, Finance Publishing House, Hanoi Phan Thi Cuc (2008), Commercial bank course books, Statistics Publishing House, Hanoi Phan Thi Thu Ha, Commercial bank course books, VNU-UEB Publishing House, Hanoi Joint Stock Commercial Bank for Investment and Development of Vietnam, 2017 Report on Card Center Joint Stock Commercial Bank for Investment and Development of VietnamTransaction Center Branch, Summary report on 2017 retail banking business performance and 2018 key tasks Joint Stock Commercial Bank for Investment and Development of VietnamTransaction Center Branch 2014, 2015, 2016 & 2017 Income Statements 10 Joint Stock Commercial Bank for Investment and Development of VietnamTransaction Center Branch 2017 Income Statements of Retail Banking Operation 11 Vietnam Card Association, Annual Meeting Reports of Vietnam Card Association in 2015, 2016, 2017 12 http://www.bidv.com.vn 13 http://www.vcb.com.vn 14 http://www.acb.com.vn 15 http://vi.wikipedia.org 95 ... - Transaction Center Branch CHAPTER LITERATURE REVIEW ON CARD SERVICE OF COMMERCIAL BANKS 1. 1 Overview about the Commercial Banks 1. 1 .1 Concept and characteristics of Commercial Banks 1. 1 .1. 1... Automated Teller Machine BIDV Joint Stock Commercial Bank for Investment and Development of Vietnam EDC Electronic Data Capture Bank Bank SBV State Bank of Vietnam CB Commercial bank POS Point Of. .. 2 016 10 230 9785 2 017 12 260 11 720 Figure 2.3: Credit growth of the Transaction Center in the period of 2 015 - 2 017 Source: 2 015 , 2 016 and 2 017 operation report of BIDV’s Transaction Center Branch