Commercial banks are now prioritising increased profits from cardpayment services as the domestic market now has 28.5 million bank cardswhich are mainly used just for cash withdrawals.

"If the issuing of cards continues to spread at its current rate, themarket will be awash with idle and useless cards. Banks should focus ondeveloping the quality of their services and extract value from theirpayment services," said Nguyen Thi Thanh Hang, director of Vietcombank'scard centre.

According to the State Bank ofVietnam, the banking system has 11,000 ATMs, 42,000 merchants and morethan 40 card-issuing banks, with over 28.5 million payment cards issuedby the end of 2010, compared to 8.3 million cards with 4,300 ATMs in2007.

The largest transaction processing systems,Banknetvn, Smartlink and VNBC, have established a network linking 42member banks with more than 8,000 ATMs.

Banks suchas Vietcombank, Eximbank, ACB, Sacombank, Vietinbank, VIB bank, SeABankand PG Bank have implemented a series of programmes to develop andencourage spending by card domestically and abroad.

General Director of PG Bank Nguyen Quang Dinh said that closerelationship between banks and retail units provided good conditions forthe development of the payment card market in Vietnam, and withimproved quality, local customers would further benefit from thisconvenient banking service.

A survey conducted byNielsen Co Vietnam found that up to 23 percent of customers used debitcard services, 1 percent used credit cards and 100 percent were aware ofATM cards, but it also showed that the use of ATM cards remained low.

Dinh said consumer habits of using cash and fiercecompetition between banks required greater efforts to encourage the useof cards for a wider range of services.

TheGovernment is encouraging the payment of salaries of permanent employeesthrough banks, and a rise in employment will also lead to a highernumber of payment cards, particularly debit cards./.