Some solution to develop the card payment activity in Viet Nam Joint Stock Comercial Bank for Industry and Trade_VietinBank for the period of 2012_2017: Luận văn ThS. Kinh doanh và quản lý: 60 34 05

VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS CHU THANH TAM SOME SOLUTIONS TO DEVELOP THE CARD PAYMENT ACTIVITY IN VIET NAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE_VIETINBANK FOR THE PERIOD OF 2012 - 2017 Major: Business Administration Code: 60 34 05 MASTER OF BUSINESS ADMINISTRATION THESIS Supervisor 1: Dr Nguyen Thi Phi Nga Supervisor 2: Dr Pham Quy Long Hanoi, 2012 COMMITMENT I would like to commit that all the content of this thesis is not submitted to any training programs or Universities I am also committed to add that this thesis is my personal effort All the analysis and conclusions in this dissertation ( Not include quotations) are the results of my personal works Hanoi, February 10 , 2012 Signature of student -Chử Thanh Tâm i ABSTRACT SOME SOLUTIONS TO DEVELOP THE CARD PAYMENT ACTIVITY IN VIETNAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE FOR THE PERIOD OF 2012 - 2017 Chu Thanh Tam MBA Candidate, 2008 – 2010 Vietnam National University, Hanoi School of Business Supervisor: Dr Nguyen Thi Phi Nga and Dr Pham Quy Long February 2012, 111 pages Vietnam Joint Stock Commercial Bank for Industry and Trade is one of the four largest banks in Viet Nam VietinBank has emerged as the most effective and profitable bank in Vietnam banking sector, with the goal of becoming the number one financial group in Vietnam and has positioned in Asia within to years, one of present strategies to achieve above objectives, VietinBank determined that developing retail banking services as important part constitutes strategy In which, develop card account product, payment card, especially card payment service is considered the core product in the context of extremxe active card market in Vietnam today VietinBank entry the card market relatively late, before 2008 VietinBank products and services card had not located the great value to people in compare with card’s brand of others bank Since 2009, Vietinbank officially reached its spectacular from low class market share to become the absolute leader in market share for the number of cards issue and POSs However, the card quality, in detail card payment turnover or revenue on cards not worth the potential of VietinBank, not worth the current leading market share in quantity now ii In card payment services market, Although VietinBank has ranked second in market share, the distance is not really far from the adjacent bank and still keep the far distance from the leading bank in this field_ VietcomBank With the big current potential and advantage, VietinBank can fully become the leading bank for service segment in general and card payment services in particular when developing a appropriate strategy To support VietinBank in building solutions, the thesis will analyze opportunities and challenges from the market, at the same time clarify and analyze the strengths and weaknesses from the VietinBank, from which to set out some measures to improve efficiency of VietinBank card payment business These measures are feasible, close to the reality of VietinBank, if applied they will actually support VietinBank further improve competitiveness, promote strength, resolve weaknesses From which completely shorten the gap with the leading banks and compellingly striving to leader in short time iii TÓM TẮT MỘT SỐ GIẢI PHÁP NHẰM NÂNG CAO HIỆU QUẢ HOẠT ĐỘNG KINH DOANH THANH TOÁN THẺ TẠI NGÂN HÀNG TMCP CÔNG THƯƠNG VIỆT NAM 2012 – 2017 Chử Thanh Tâm Học viên MBA, 2008 – 2010 Đại học Quốc Gia Hà Nội, Khoa Quản Trị Kinh Doanh Hướng dẫn: Tiến sĩ Nguyễn Thị Phi Nga Tiến sĩ Phạm Quý Long Tháng năm 2012, 111 trang Ngân hàng TMCP Công Thương Việt Nam (VietinBank) ngân hàng lớn Việt Nam VietinBank lên ngân hàng hoạt động hiệu lợi nhuận lớn ngàng Ngân hàng Việt Nam, với mục tiêu trở thành tập đồn tài số Việt Nam có vị Châu Á vịng đến năm tới, chiến lược đề nhằm đạt mục tiêu VietinBank xác định phát triển dịch vụ Ngân hàng bán lẻ phận chiến lược cấu thành quan trọng Trong phát triển sản phẩm tài khoản, thẻ toán đặc biệt dịch vụ toán thẻ coi sản phẩm cốt lõi bối cảnh thị trường Thẻ Việt Nam động VietinBank gia nhập thị trường thẻ muộn, trước năm 2008 sản phẩm dịch vụ thẻ VietinBank chưa định vị giá trị lớn với người dân so với thương hiệu thẻ Ngân hàng khác Song thức kể từ năm 2009 Vietinbank vươn ngoạn mục từ vị trí thị phần số lượng thẻ nằm chiếu đến đứng đầu tuyệt đối thị phần số lượng thẻ/ máy toán thẻ phát hành Tuy nhiên chất lượng thẻ, mà cụ thể iv doanh số toán thẻ, nguồn thu thẻ chưa xứng đáng với tiềm cuả VietinBank với thị phần số lượng số Trên thị trường toán thẻ, vươn lên vị trí thứ hai thị phần dịch vụ tốn thẻ khoảng cách khơng thực xa so với ngân hàng liền kề cách xa so với ngân hàng dẫn đầu VietcomBank Với tiềm lợi lớn tại, VietinBank hồn tồn trở thành ngân hàng dẫn đầu mảng dịch vụ nói chung, dịch vụ tốn thẻ nói riêng xây dựng cho minh chiến lược đắn phù hợp Đề hỗ trợ việc xây dựng chiến lược cho VietinBank, luân văn phân tích hội thách thức đến từ thị trường, đồng thời phân tích làm rõ điểm mạnh, điểm yếu từ phía VietinBank để từ đề số biện pháp nhằm nâng cao hiệu hoạt động kinh doanh toán thẻ VietinBank Đây biện pháp có tính khả thi cao, sát với thực tế Ngân hàng TMCP Công Thương Việt Nam áp dụng thực hỗ trợ VietinBank nâng cao lực cạnh tranh, phát huy mạnh, giải điểm yếu để từ hồn tồn rút ngắn khoảng cách với Ngân hàng dẫn đầu mảng vươn lên đầu cách thuyết phục tuyệt đối v TABLE OF CONTENTS COMMITMENT i ABSTRACT ii TÓM TẮT iv TABLE OF CONTENTS vi LIST OF TABLE ix LIST OF ABBRIVIATIONS xi INTRODUCTION .1 CHAPTER 1: THE BASIC ISSUES ON THE CARD PAYMENT ACTIVITY .4 1.1 OVERVIEW OF THE BANK CARD AND REAL SITUATION OF THE CARD PAYMENT .4 1.1.1 Definition of the bank card and card payment 1.1.2 Classification of bank card and form of card payment 1.1.3 The of formation and development history of the payment card in Vietnam 1.2 PROCESS OF THE CARD PAYMENT 12 1.2.1 Overall process of card payment 12 1.2.2 The participation entities of the card payment 13 1.2.3 Charges and charges sharing rate in the card payment activity .14 1.3 THE ROLES AND THE MEANINGS OF CARD PAYMENT ACTIVITY 15 1.3.1 For the society- national economy 15 1.3.2 For the bank joining in the payment 18 1.3.3 Impact on the card owner and the unit accepting the card payment 22 vi CHAPTER 2: THE FACTUAL SITUATION OF CARD PAYMENT IN VIETINBANK 26 2.1 GENERAL INTRODUCTION ON VIETINBANK 26 2.1.1 The general introduction on VietinBank 26 2.1.2 The general introduction on VietinBank Card business Center .27 2.1.3 The process of formation and development of payment operation by card at VietinBank 30 2.2 THE POSITION OF VIETINBANK CARD SERIVES 32 2.2.1 The prominent speed of growth, leading in the quantity of market share 32 2.2.2 The quality and profit have not yet been proportional to the potential 37 2.3 THE FACTUAL SITUATION OF IMPLEMENTATION AND DEVELOPMENT OF PAYMENT SERVICE BY CARD IN VIETINBANK .41 2.3.1 The factual situation of implementation and development of card business and payment .41 2.3.2 The evaluation of real situation of conducting and developing the VietinBank’s card payment 54 2.4 SWOT ANALYSIS ON VIETINBANK CARD PAYMENT BUSINESS 59 2.4.1 External environment analysis- challenges and opportunities of VietinBank 60 2.4.2 Internal environment analysis- strong and weak point 68 2.4.3 SWOT matrix analysis 75 CHAPTER 3: SOME SOLUTIONS TO DEVELOP CARD PAYMENT ACTIVITY IN VIETINBANK 80 3.1 Focusing on the market segment, groups of lines and types of card which bring the sales of payment and profit 80 vii 3.1.1 Exploiting the group of lines bringing the sales of payment and high profit .80 3.1.2 Increase the transaction according to the card forms and the transaction forms 81 Cover and scoop the whole open and potential market 83 3.3 Improve the card payment business effectiveness through marketing mix 7Ps 85 3.3.1 P1 - Product: 85 3.3.2 The price 92 3.3 Promotion and media 95 3.3 Place - Distribution channels 97 3.5 Human resource 99 3.6 The process 100 3.7 The physical evidence 102 3.4 SOME RECOMMENDATION 104 3.4.1 The recommendation to the government on the policy and legal lobby 104 3.4.2 The recommendation to some relevant merchants, boards, sections 105 REFERENCES 106 Appendix Apenndix Appendix viii LIST OF TABLE Table 2.1 : The results of Card payment implementation and development 42 Table 2.2 : Popupar Objetion on POS sales 44 Table 2.3 : Parameters of the training conduct 47 Table 2.4: Some basic financial indicators .54 Table 5&6: estimation calculation of some finacial indicators on two leading banks 57 Table 2.7: Takcare quality comparison table 73 Table 3.1 : VietinBank revenue by region and category 80 Table 3.2: Revenue by credit card type .82 Table 3.3: MOTO transaction and the normal transaction comparison 90 Table 3.4: EDC quantity and card payment revenue 98 ix Figure 3.2: The awareness of promotion programs Sources: Servey result – Appendix 100% Information amount 80% Information amount left 10% Information amount left Figure 3.3: Information flow (Sources: Marketing department – VietinBank card center) 96 Let’s consider the information source to Merchant as follows to realize that the quality of transferring information is not really good Conducting the information of promotion program to Merchants is often inadequate There are a lot of reasons to explain why the information does not move to the right position The first reason is that sometimes the promotion program has the complicated contents which it is difficult to deliver and often combines with a lot of conditions, articles In addition, the system of information for timely report and analysis for Merchants is fairly slow, namely many merchants are informed to receive the bonus from July but until November the procedures have not been completed to receive the bonus It is very necessary to change the media: The first important step is to build up the system of data base on Merchants and this base is used to implement forms of information such calling for periodic care and reporting via telephone, fax, email, message for the key point of Merchants on the information of the program Together with the copied report of payment transaction for the unit, there are the contents of promotion program and updating their results of implementation in order to get the motivation to try It is necessary to build up the long term program of media; however, the summary is short-term 3.3 Place - Distribution channels Let’s consider the reasons leading to the Vietcombank’s success: Although the network is not wide, Card business Centre is only half; they still have enough capacity to care and even care very well the number of merchants accepting the bigger cards of VietinBank The reason is that they are using the professional third partner The outsource brings the big efficiency For 97 example, Nam Thăng Long branch of VietinBank is now using the third partner to care and exploit Merchants ITEM YEAR 2010 YEAR 2011 The quantity of installed EDC 70 1000 billions 74 billions The sales of card payment Table 3.4: EDC quantity and card payment revenue (Sources: VietinBank – Card business center) Using the third partner, the above branch increased the sales of card payment up to 12 times and the number of Merchants increased 13, times Thanks to the third partner, the quantity of Merchants to exploit for one branch is equivalent to the combination of all branches in the North With the experience and specialization, the third partner will specialize in caring Merchants to ensure incurring the sales Figure 3.4 : POS Sales chanels (Sources: VietinBank – Card business center) 98 The agency- The third partner: This is the individual, organization which plays the role as one channel of developing the service of card payment, implementation of exploitation operation, meeting and introducing the products of card for the potential clients VietcomBank and the above branches selected the partners effectively because they selected on the base of understanding the card market in Vietnam and they have the business network covering the market, strong ability of finance, good prestige in the market and they does not trade the product of the same type of other competitors; their force of staff is well trained in the specialization In addition, it is impossible to rent the cashier of the unit to be the partner caring for that Merchants This way can be applied for huge Merchants which operate according to the chain 3.5 Human resource Adding the human resources getting enough necessary knowledge and experience which the work requires: The human resource needs to get the knowledge related to well using the machine of card payment, experience to address the popular mistakes, the way to care the client, especially the prissy or VIP clients Furthermore, the passion for the work is also the criteria of great importance The supplementary training to enhance the specialization on the knowledge of product when the new product appears: Currently, the knowledge on the package of MOTO product of many staff is limited, updating and conducting the promotion programs are late The standardization of the client service means the client service after selling, including caring and addressing the obstacles for the clients, namely: lack of printing paper, full memory, error in transmitting or the mistake of receiving the client’s money twice It is necessary to ensure that the unit masters the key 99 unit to contact in case of getting the incident In addition, it is essential to train quickly and timely the new cashiers to understand about the machine of brushing the card It is also necessary to evaluate the capacity and performance of the work through the client’s assess, satisfaction level: Currently, the system is getting the total of nearly 15,000 machine of payment, dividing for 12,000 merchants receiving the cards 3.6 The process Building up the policy of long-term card payment: A lot of staff of VietinBank realize that the policy of Merchants new opening process is fairly complicated and lack of orientation for the branch on the Merchants installation and care comprehensively; providing the categories, equipment of payment machine is passive; the applications at POS machine, installing the parameters is long; the works of POS installation has not yet been professional; the psychology of being afraid of addressing the problems in the process of working, lack of experience of addressing the risks, issues of media and ineffective promotion, facing the competition in cost of other banks Currently, VietinBank has a lot of processes; however, there has not been a completed process related to Merchants, It is very necessary to get one process of completed Merchants exploitation, care to address obstacles, increase the specialization of VietinBank in Merchants It is also necessary to get one process of new standard to create the standard quality It is possible to search information to apply the international standards such as ISO, etc in order to standardize the process and increase the efficiency In addition, in the small process which is being applied at the current time (Signing the contract), it is possible to miss the unnecessary steps 100 The process which the unit of accepting the card applies for the branch and group of management includes the chapters, sections as follows: Part 1: Exploiting and opening the CNT unit - The process of exploitation and opening Merchants: The adequate set of document - Instructing the exploitation and opening Merchants: Gathering the experiences and instructions Part 2: Installing the machine and training - Instructing the way of using and installing the categories of machines: P70, P80, S90, V×510, software for Banknet payment, buying sim, connecting the lines, loading the parameters, etc - The content of training the cashiers: Relating to the technique, transmission line - Check list of Merchants care: Including articles to implement Part 4: The product of integrated payment: For the client: For each 10, 00 VND of consumption for card payment, the client will be received the equivalent loyalty Currently, for 10,00VND of consumption, the client will be received the Loyalty worth 50 VND The amount is small; however, instead of the fact that the client uses 100 million to buy the goods by cash without receiving anything; the payment by card of VietinBank will bring the client the amount of million VND In term of cashiers: The more the client uses the card, the more bonuses the cashiers receive; the higher the value of card, the bigger bonus the bank gives to the cashiers The cashiers’ income is not high; therefore, the bonus for them when the sales of card payment for the bank is high bring the big meaning In term of the owner of the unit: Advertising the unit to the holder of VietinBank through the online website links on the copies of the holder of 101 credit holders Other way is that it is possible to continue selling relevant service packages to add to the service of card payment in particular and the business operation in general For example, opening the bank account at the bank and take advantage of short-term idle money into the weekly savings; Opening the credit card, salary payment card for the staff; Bringing the unit to become the location of priority for selection of 18,000 cadres as well as million card holders of VietinBank; treating the merchants as the VIP clients by caring, presenting the gift on the birthday and important celebrations 3.7 The physical evidence Physical evidence is the material part of service Strictly speaking, there are no physical attributes to a service, so a customer tends to rely on material cues In the case of VietinBank, physical evidence tends to be some of the following: The compulsory requirement is that when exploiting and caring the MERCHANTS, the staff of VietinBank must wear the uniform and signs, logo adequately: Currently, VietinBank’s staff has not worn the common uniforms; in spite of getting the company’s logo and card, when coming to the unit of exploitation and care, the staff has not got used to use the uniform and logo of the company As the result, to contribute to create good expression on the professional service of care of VietinBank, it requires the cadres to wear the uniform when exploiting and caring according to the regulation of VietinBank and the staff always bring the name card This needs to apply for all collaborators and the third partner; this partner also needs to wear the card issued by the bank This also creates the professional image for the bank and avoids the situation that the competitor poses to draw line or cause the action of internal destruction 102 Upgrading the construction of website which has the update list of Merchants and it is easy to search according to the lines and geographic position: Through the survey and comparison with competitive banks as well as other professional foreign banks, it is possible to realize that currently, the interface of website related to the service of card payment of VietinBank has some limitations; if the situation is improved, this will contribute to enhance the quality of media as the trade mark (currently, the form is so simple , not attractive and the information is not update, lack of accurateness and it is difficult to search) It is necessary to upgrade the website of VietinBank in general and column of card payment in particular Firstly, the interface needs to be attractive so that immediately after opening the web, the client got the impression on the most prominent details of the program for Merchants It is also necessary to add the tab for the merchants which accept the card so that the merchants can master the information of the bank when it has the demand of installing the machine of payment and this will reflect the issues of payment or giving the relevant questions to turn the web into the channel of selling and caring the client; tab for the client using the service of card payment of VietinBank clarifies the locations of update card payment with the information of reducing the price during the promotion time Building the set of signals to identify the unit of accepting the card: The current signals are the marks issued by the organization of the Visa/Mastercard international card and the signal panel “Accepting the payment by card” and the behind is the part of use instruction Currently, many merchants installed the VietinBank’s machines; however, if the machines are in the positions which it is difficult to observe, the clients will feel hard to realize that this allows to pay by card In addition, the current signals of identification is often Logo of card organization (Visa, Master card, JCB, WE prefer, etc.) and Blanknet logo- Smartlink logo, images of card 103 types of the banks which has the ability to pay The limitation is that the signal of identifying misses the holder of ATM; for the card holder has not got used to the international symbols in English, it is necessary to use the set of signals of identifying MERCHANTS in Vietnamese 3.4 SOME RECOMMENDATION 3.4.1 The recommendation to the government on the policy and legal lobby It is very necessary to issue the policies of encouraging the operation of payment by card- building up the spending way of not using the cash and creating the legal lobby- improving the document allowing the areas of the State to pay by card Together with the development of the science, technology and media, a lot of new service of payment; however, the legal lobby has not been established The mechanisms, policies to push up the payment without using the cash are not consistent, not encouraging the strong investment for the infrastructure; the combination between the administrative measures and the methods of stimulating the economy is not strong enough to take the guidelines into the reality For the service of card, until now, the bodies managing in the macro scale such as the government, state bank, ministry of finance has not issued the policy to create the breakthrough for the service of payment by card such as: Regulating the forms of business which is compulsory to pay by card, reducing/repaying tax for the transaction of payment by card, exempting/reducing import tax for the equipment of payment by EDC card, etc 104 3.4.2 The recommendation to some relevant merchants, boards, sections  The State Bank: needs to manage the floor level and ceiling level of payment cost closely to avoid the situation of devaluation  The sector of telecommunication: increases the quality of internal transmission line to avoid the situation that the machine can not pay due to the weak internet  The sector of electricity and fresh water provision: Gives the guideline of agreeing to conduct receiving money of electricity-water by card  For the Ministry of Labor, Invalid War and Social Affair: needs to officially issue the encouragement regulation in general and it is compulsory to pay the salary through the account of card for some unit of business  For the Department of Planning and Investment: needs to build up the regime of encourage policy and priority for the enterprises installing the machine of brushing card by giving the tax incentive and some relevant programs 105 REFERENCES Association of Vietnamese Bank Card, Operation report Card 2008, operation orientation in 2009, 2009, Hà Nội Association of Vietnamese Bank Card, Operation report Card 2009, operation orientation in 2010, 2010, Hà Nội Association of Vietnamese Bank Card, Operation report Card 2010, operation orientation in 2011, 2011, Hà Nội Bank card technology Jounal in 2009-2010 Goverment (2006), "Projects non-cash payment in period 2006 – 2010 and orientation to 2020”, Hanoi Porter, M.E (1990,1998) “ The competitive Advantage of Nation”, Free Press, New York, 1990 Porter, M.E (1990,1998) “Competitive Strategy: Techniques for Analyzing Industries and Competitors”, Free Press, New York, 1980 Philip Kotler, Kevin Keller, Mairead Brady, Malcolm Goodman, Torben Hansen “ Marketing Management” , Pearson Prentice Hall Press, New York, 2009 State bank of Vietnam, Technological achievements and mordern banking service - Science Conference material , 2006, Ha noi 10.State bank of Vietnam , Card operation report 2009, operation orientation in 2010, 2010, Hanoi 11.Trương Đoàn Quốc Dũng " Development of card service require synchronous solutions to create new turnpoints”, Finance and monetary market Journal, No 15/ 2008 12.Trần Văn Hiệu, “Discussion on the development card payment customers of commercial banks”, Finance and monetary market Journal, No 12, 2010 13.Vietnamese Communist Party, " Strategy to develop socio- economic 2000 – 2010”, Document of the 10th Party , 2000 106 Appendix QUESTIONAIRE FORM – (Merchant) I.General information You are : Manager : … Cashier …… Name of Merchant: ……………………………………………………… II Content Please tick “۷” at the propriate answer: Question 1: Do you know the current promotion program of VietinBank  Don’t know: ………  A little: ………  I Know quite well: ……… Question 2: If yes, please give the name of the current Programge  “ Quốc khánh trọn niềm vui”: ………  “ Kỳ nghỉ vàng mừng Quốc Khánh”: ……  “ Thanh toán nhanh tay, quà lớn trao ngay”: ………  I don’t know the name: ………  Other name: ……………………………………… Question 3: If yes, please give the time of the programe  1/9 – 15/10: ………  15/8 – 15-9: ………  20/8 – 30/9: ………  Others: ……… Question 3: Fill in some detail of the Programe ( If yes ) Vourcher 200.000 vnd/ transaction For customer For Cashier For Merchant ……………… ……………… ……………… Bonus per 500.000 vnd card payment sales ……………… ……………… ……………… Bonus per card payment transation ……………… ……………… ……………… 107 Result of survey 1: - Merchant Question Don't know A little Quite well Selection 59 24% 23 9% 18 7% Question Answer Answer Answer 0% Answer Answer 100 100% Answer Selection 22 9% 19 8% 4% Question Answer Answer Answer 40 16% Answer 10 4% 100 100% 108 Selection 25 10% 36 14% 22 9% 17 7% 100 100% Appendix QUESTIONAIRE FORM – (Customer) I.General information You are : Age: … Card using …… II Content Please tick “۷” at the propriate answer: Question : Have you ever use card payment method instead of cash payment  I don’t know this function of my card ………  Rarely ………  Sometime – more often ………  Usually ……… Question : Why you choose this bank card for paying ( if yes at question 1)  My receiving - salary card of company ………  Attractive Promotion program ………  Others suggest me ………  Because: ………………………………………………………………………………… …………………………………………… Question 3: When you choose a certain bank POS to pay ( card payment method) …………………………………………………………………………………… …………………………………………………………………………………… …………………………………………………………………………………… …………………………………………………………………………………… …… -Result: Question Don't know Rarely Some time Usually Total Selection 110 44% 83 33% 30 12% 27 11% 250 100% Question Answer Answer Answer Answer 109 Selection 121 48% 20 8% 32 13% 77 31% 250 100% Appendix QUESTIONAIRE FORM – VietinBank Staffs I.General information You are : Manager : … Staff: …… II Content Please tick “۷” at the propriate answer: Question : rated in order from highest to lowest ( – 6) for the problems you encountered in implementing card payment service development  Complex process : ………  Poor attractive promotion program ………  Service quality ………  Scare human resource ………  Price competion ………  Other: ……………………………………………………… If you can please tell some thing in short about some solution to improve the card payment tunrnover in your branch …………………………………………………………………………………… …………………………………………………………………………………… …………………………………………………………………………………… …………………………………………………………………………………… …… -Result: Answer Complex process Poor attractive promotion program Service quality Scare human resource Price competion Other 110 Total points 155 420 235 115 195 350 Rank