News

Vietnam banks seeking a formula for ATM profitability

March 23, 2012

As they struggle to make a profit, many banks in Vietnam are rethinking their ATM placements and processes in hopes of hitting on a formula that will offer a better return. Vietnam.net said in an article that banks were rearranging ATM locations, removing machines from low-traffic areas and improving their networking capability.

Most banks have not earned profits from card services because the cost of building and operating ATM facilities is high and is not being offset by usage fees. Phi Thi Phuong, head of the card-service office of the Export–Import Joint Stock Commercial Bank, said the bank had yet to make a profit from the 300 ATMs it had installed in the last decade.

To reduce its operating costs, Eximbank has reconfigured its ATMs, placing three or four together in a single location to defray space rental costs. The bank also has made a deal to connect with the Banknetvn Smartlink system in order to enable interbank connections, diversify card services and drive cardholder usage.

Despite the difficulties, Vietnam bankers believe that the market will eventually begin to generate profits. Nguyen Van Dung, deputy director of the State Bank of Viet Nam Branch in HCM City, said the government should develop support polices to help the industry realize its potential. He suggested a tax break for businesses that supplied products and services via cards, and incentives for consumer to pay at POS locations that accept cards.

For more on this topic, visit our installation/deployment research center.