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CHAPTER ONE: OVERVIEW OF BANKCARD
1.1. General introduction about bankcard
1.1.1 History of bankcard
Bankcard history began when individual retail merchants extended credit to their
customers, allowing them to charge purchases to an account held by the merchant.
In 1730, Christopher Thompson, a furniture merchant, created the first
advertisement for credit by offering furniture that could be paid off weekly. However,
1950 marked the real beginning of the credit card most of us are familiar with today.
Diner’s Club, Inc. introduced the first credit card that could be used at a variety of
stores and businesses. Advantages of this card immediately took notice of many
people.
In 1960, Bank of American introduced its own bankcard, the BankAmericard. In
1966, fourteen United States banks formed Interbank, a new association with the
ability to exchange information on credit card transactions. The following year, 1967,
four California banks changed their named from the California Bankcard Association
to the Western States Bankcard Association (WSBA). The new WSBA licensed
Interbank to use the MasterCharge name and logo. In the late 1960s, numerous
financial institutions became MasterCharge (Interbank) members to compete with
BankAmericard. Eventually, financial institutions interested in issuing cards in the
U.S. became members of either BankAmericard or MasterCharge. In 1977,
BankAmericard became Visa USA/ Visa International. In 1979, MasterCharge
changed its name to MasterCard to reflect its expanded services. At the present time,
the leaders in the bankcard systems are Visa, Master Card, Amex and JCB.
Payment by bankcard quickly become popularity in other countries. In 1960, the
first plastic card was used in Japan marked the beginning of bankcard in Asia. The
first plastic card of Barcaly Bank issued in 1966 also highlighted a new period of
development of bankcard in Europe.
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In Vietnam, the first card was accepted in 1990. It was the starting point for
card’s products and services in Vietnam. Nowadays, bankcard presents all over the

and the funds are not deducted for 24-72 hours.
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Cards
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Most issuers of debit cards are moving to this type of card rather than on-line
debit card
- Credit card: A plastic card bearing an account number assigned to a cardholder
with a credit limit that can be used to purchase goods and services and to obtain cash
disbursements on credit, for which a cardholder is subsequently billed by an issuer for
repayment of the credit extended at once or on an installment
basis
- Cash card: Cash cards are similar to pre-paid phone cards. The card is worth a
certain amount of cash and the retailer must use a special cash card reader to debit the
card. Each purchase is deducted from the value left on the card until the pre-paid
amount is spent. These cards are just like cash – if lost or stolen, there is no way to

For example MasterCard or Visa International/Visa USA, they are worldwide
payment service organization composed of member institutions. They set and enforce
rules and regulations governing operational procedures, interchange procedures, and
graphic design approval of their cards…
These organizations do not have a direct relationship with cardholders and
merchants.
Any bank has international card must be a member of an ICO
The issuing
members
International
card
organization
The acquiring
members
Merchant
Cardholders
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* The issuing members: The cardholder’s financial institution (usually called the
issuing member, or issuer) is a licensed member of an ICO. The issuer directly issues
the card to the approved cardholder. The issuer may also benefit from services of a
third party processor and/or association in processing information and payments.
* The acquiring members:
The acquiring members, or acquirer, solicits, screens and accepts merchants into
its bankcard program. The acquirer is also a member of an ICO, and holds a written
agreement with the merchant to:
- accept the merchant sales drafts
- provide the merchant with credit card authorization terminals, instructions, and
contracted support services
- handle and process the credit card transactions
The acquirer usually charges the merchant a merchant discount for handling the

- Receiving new card and personal identity number (PIN) from card centre
- Handing card and PIN over customer
Customer
Application
Approval

Guide of using
Handing card
and PIN over
Receiving new
card and
PIN from centre
Registration of
issuing
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- Guiding customer to use card
+ Card centre
- In responsibility of receiving information of customer from issuing banks
- Produce new card
- Deliver card to issuing banks
* Acquiring:
Figure 4.- Procedure of acquiring cards
Source. Developed for the report
The acquiring procedure beginning with the cardholder:
(1) - The cardholder purchases goods or services from the merchant
(2), (3) - The merchant, in effect, sells the transaction to the acquire and is
reimbursed the amount of the sales ticket by the acquirer
(4) - The acquirer then summits the ticket to the issuer for payment, via the ICO
interchange and settlement system.
(4)

founded under Decision No 1292/QĐ/HĐQT/TCCB dated November 29th, 2007 by
the Board of Directors of Agribank with the primary staff of 36 people.
Located in 90 Lang Street, Thanh Xuan District, a vast residential area with
many convenient economic conditions, Agribank Thanh Xuan has many advantages
to do business effectively. Thanh Xuan branch operates its business mainly on Thanh
Xuan District and other Districts in Hanoi. Being in the strategy of organization
network development of Agribank, Agribank Thanh Xuan has played an important
part in improvimg business performance of Agribank, as well as contributed to shift
economic structure, promoted the further economic-social development of Thanh
Xuan District in a comprehensive and sustainable way.
Since establishment, Agribank Thanh Xuan has continuously extended trading
networks, diversified items of business, currency, and credit, promoted capital
sources. The branch is also focusing on improving the qualification of staff both in
professional knowledge and skills as well as foreign languages, concerning about
stabilizing and raising the networking and living conditions of employees. Facilities
are modernized, especially information technology, to serve the business better. From
establishment, the branch always makes profits, the revenue is higher year after year,
contributing to State budgets increasingly, creating credibility with customers.

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Source. Secondary data of Administration Department of Agribank Thanh Xuan
The pie chart shows the education degree of staff in the branch. Staff and
employee in the branch has high education degree 86% of bachelor, major in
economics, banking or financial field. With a skillful and high education degree of
work force, it is one of the most important advantages to build a strong and
sustainable branch. Continuously developed and widened, the staff and employees in
the branch has raised to 72 people at the present time.
2.1.2. Organization structure
Through years of operation, Agribank Thanh Xuan has developed widely, at the
present time it has a business network of five dealing rooms. They are: Thirty two

Supervision
Deputy
Director
Plan &
Business
Department
Accounting
& Treasury
Department

Dealing
Rooms
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Regulation on organization and operation of Agribank. Agribank Thanh Xuan
provides products and services which serve:
- Personal customers: They are individual, households join transactions in the
branch. The branch provide these customers: Individual account, loans, savings and
investment, remittance, Agribank card, foreign exchange
- Corporate customers: They are target customers of the branch. Money flow
often in a great number. They are organizations, corporate… Services and products
include: guarantee service, international payment, account, lending, check services,
valuable notes, payment, border payment, saving deposit, leasing, foreign exchange,
factoring
- Financial institutions: Agribank hope to “provide various services in order to
satisfy customers coming from financial institution sectors”. These services are: retail
banking, foreign exchange, treasuring, financial trading, project based lending.
2.2. Marketing activities at Agribank Thanh Xuan
2.2.1. Organization of Services and Marketing Department
Figure 8. Services and Marketing Department
Source. Secondary data of Administration Department