MEASURES TO DEVELOP PAYMENT
CARD SERVICES AT BIDV, HANOI BRANCH


REPRESENTATIONS
The project “Measures to develop payment card services at BIDV, Hanoi branch” is
my own research. The data and results of the project are my own collection and using
my knowledge and discuss with our instructors to complete this project.
Hanoi, 2013


CONTENTS
REPRESENTATIONS..........................................................................................…. .I
LIST OF ACRONYMS............................................................................................. vii
LIST OF TABLES AND FIGURES.........................................................................
............................................................................................................................... viii
INTRODUCTION...................................................................................................... .1
1. Urgency of topics:....................................................................................................1
2. The research objectives...........................................................................................1
3. Research Object and Scope....................................................................................2
4. Research Methodology:..........................................................................................2
5. Time.......................................................................................................................... 2
6. Outline details..........................................................................................................2
CHAPTER 1: THEORETİCAL BASİS....................................................................3
1.1 Products and product development to satisfy customer needs..........................3
1.1.1 The product concept:............................................................................................3
1.1.2 Products development to satisfy customer needs.................................................3
1.2.The bank cards and card services........................................................................5
1.2.1. Bank card............................................................................................................5
1.2.1.1 The concept of bank cards:................................................................................5
1.2.1.2 Characteristics of bank card..............................................................................5

2.2.2.2. Credit activities..............................................................................................31
2.3. Situation Analysis Services of bank card in BIDV Hanoi...............................32
2.3.1. Introduction.......................................................................................................32
2.3.2 Current status of issuing BIDV Hanoi................................................................33
2.3.2.1. The cards issued by BIDV..............................................................................33
2.3.2.3 BIDV’s VISA Card.........................................................................................34
2.3.2.4 Status of payment card operations...................................................................37
2.3.4 Analysis results of card business........................................................................37
2.5. SWOT Analysis...................................................................................................42
2.6 Competitive Environment Analysis...................................................................47
2.7 Analysis of the level of customer satisfaction....................................................49
CHAPTER III...........................................................................................................51


CONCLUSIONS AND COMPREHENSIVE SOLUTION TOCOMPLETE
BANK CARD SERVICES IN BIDV HANOI.........................................................51
3.1. Solutions to complete bank card services in BIDV Hanoi...............................51
3.1.1. Completing card products.................................................................................51
3.1.1.1. Development of new card products................................................................52
3.1.1.2. Goals..............................................................................................................52
3.1.1.3. Develop flexible pricing strategy...................................................................53
3.1.2. Promote and expand distribution channels, relationships with partners............54
3.1.3. Promote mix promotion....................................................................................56
3.1.3.1. Advertising.....................................................................................................56
3.1.3.2. Public Relations (PR).....................................................................................56
3.2.3.3. Image Promotion, Sale...................................................................................56
3.1.3.4. Personal Sales.................................................................................................57
3.1.3.5. The other method...........................................................................................57
3.1.4. Human Resource Development.........................................................................57
3.1.4.1. Appropriate recruitment and using.................................................................57

IBMB
ACSI

The State Bank
International Card Organization

Issuing Bank
Payment Bank
Cards Accepted Unit
Bank for Investment and Development of
Vietnam
Bank for Investment and Development of
Vietnam, Hanoi Branch
Card Center
Automated Teller Machine
Point Of Sale

Commercial Bank
Vietnamese standards
Internet banking,Mobi banking
American Customer Satisfaction Index


LIST OF TABLES AND FIGURES

Figure 1.1: The process of issuing...........................................................................20
Chart 1.2: Card payment process.............................................................................22
Table 2.1: Model organizational structure of BIDV Hanoi......................................33
Figure 2.2: Data Bank's funding of BIDVHanoi......................................................34
Table 2.3: Volatility of capital by mobilizing resources...........................................35

Besides, with the development of science and technology, media has made the
card product to take effect in the sale of their goods and services in countries
around the world become convenient and quickly.
That is the reason why we have global brand as VISA, MASTER card...,
some of international company of cards are widely known. At the same time,
many banking groups in the world have strong competition in the issuance and
payment, provide significant income in the total income of the bank.
Development of card services, contributing to reducing the proportion of
cash payments in the economy and bring utilities to the people and for the
service providers. However, current service is not really developed well, not
really bring utilities to the cardholder as well as become a means of non-cash
payment in the popular economy.
From this fact we chose the topic: “Measures to develop payment
card services at BIDV, Hanoi branch” to research in my project
2. The research objectives

- Research rationale of development payment card, credit card (VISA) in
BIDV Hanoi.
- The problems in the development card services in BIDV Hanoi


- Proposals for the development card services to meet the needs and
satisfaction of customers.
3. Research Object and Scope

- Research Object: Research in development of card services, credit
cards VISA in BIDV Hanoi.
- Research Scope: is the content of card development in BIDV Hanoi,
2009 - 2012
4. Research Methodology:

Product is defined as "the result of the activity or process." The process may be
producing activities alter physical and chemical properties of the material
increases its value or provide a service to meet the specific interests of the
people. All organizations, businesses, industries, sectors of the national economy
are creating or providing their products to society. According to this view, the
product is widely interpreted, not only is the material specific items but also
includes services.
Today a complete product is produced and circulated in the market has
two components which are the properties of hardware, software or a
combination of them
Hardware products include tangible physical attributes which expresses
in a concrete form, clearly reflects the different value, functionality, utility
engineering, economics of the product.
Software products are intangible factors including the types of services
that provide to clients and other factors such as information, concepts, and
related services...Nguyen DinhPhan, Dang Ngoc Su (2012).
According to PHILIP Kotler: Products are everything that people can sell
in the market to pay attention, purchase, use or consumption, can satisfy a desire
or need.
1.1.2 Products development to satisfy customer needs
In the tough competitive business environment today, the product quality
to become one of the most important bases of the purchase decisions of


customers so that determination customer, customer's needs and rated
satisfaction to seek the ways to serve them better is especially important for any
business. Customers are prerequisites for every business to survive and grow.
The key of the success in competition is to maintain and develop clients through
continually meet their needs in the best way. So, the task of every business is is
defined who raethier customer from which to find what should offer and how

service provided to customers and the need to ensure are met on the basis of
their satisfaction. The satisfaction of customers is made on the basis of perceived
quality, expectations and perceived value, if the quality and perceived value
higher expectations will create loyalty with customers, otherwise, there are no
complaints or grievances about the products they consumer.
In this project, the author will analyze the criteria of customer
questionnaires on perceived quality, expectations and perceived value to lead to
customer satisfaction, analyzed by SPSS to provide results and analyze the
questions quantitatively.
Question of the professionals is qualitative to give solutions to improve
quality of service cards.
1.2.The bank cards and card services.

1.2.1. Bank card
1.2.1.1 The concept of bank cards:
Bank cards as a means of non-cash payments, was born from the
purchase method under retail and development associated with the application of
information technology in the banking sector. Bank cards are payment
instruments issued by bank card for customers to use payment for goods or
services within the cash balance or deposit your credit limit granted. Bank cards
are used to perform these services through automated trading system, also
known as self-service ATM system.
According to the "Regulation on issuance and payment using bank cards
" issued together with Decision No. 371/1999 QD / SBV dated 10/19/1999, the
bank card is payment instruments which are issued by the Bank for customers to
use following the contract between bank and cardholder
1.2.1.2 Characteristics of bank card
The current bank cards, most of them are characterized as follows:





Magnetic Card: the card that the cardholder's information has been
embossed on the front of the card has been encoded in the magnetic tape on the
back of the card. This information must be correct and match.
Smart card: This is the latest generation of card having security features
and high safety, based on the technical computing processor, mounted on an
electronic chip card made as a perfect computer. Usually a smart card electronic
chip attached to replace the magnetic stripe of the card. It is also the case with
the smart card chip and electronic tape. The issuance and acceptance of payment
cards only prevalent in developed countries despite international card
organizations still encourage member banks to issue payment cards and to
reduce the risks of counterfeit rate face card.
If based on the nature of the payment can be classify into Credit card
Debit card
Credit card: the method of non-cash payment provides the ability to use
pre-paid expenses later. Banks and financial institutions issuing credit cards to
customers based on the reputation and ability to ensure that each customer pays.
The ability to ensure payments are determined based on criteria such as income,
expenditure status, prestige, availability relationship with financial institutions,
mortgage... clients. When using the card, instead of cash, cardholders present
their cards at the point of supply of goods and services for payment card
acceptance.
Debit card: Like credit cards, debit cards as well as a means of cashless
payment. It allows customers to access their account balances via online
connection to payment for goods or services at Merchants perform transactions
related to accounts at ATMs. The cardholder's spending depends primarily on the
balance in the account
ATM card is the first to develop forms of debit cards, customer cards
allow direct access to bank accounts from automated teller machines.

the early twentieth century until today.


Bank cards are formed in the U.S. from customers buying habits have all
of the retailers on the basis of prestige customers to shop.
In the 1914, Western Union, money transfer organization of U.S the first
time provide his customer special deferred payment services. The company
released the plate containing the information embossed perform two functions:
- Identify and differentiate customers
- Provide and update customer data, including account information and
perform transactions.
Other organizations also recognize the value of this kind of service
above and within a short time then a lot of units, such as railway stations, hotels
and stores throughout the United States has chosen provider deferred service for
its customers. Among them, the American Petroleum Corporation launched the
first gas card in 1924 to allow people to use the card to buy gasoline in stores
nationwide.
Following organizations provide goods and services. The bank entered
the market quickly with a goal card soon after this payment form on the basis of
existing relationships between entities providing goods services across the
country with extensive dealer network of banks. In 1950, Diners Club issued the
first credit card is made of Plastic
After Diners Club, in 1958, American Express Company is also involved
in bank card market and has successfully established its brand name in this new
field. Like its competitors, American Express card development focus in the
field of tourism and entertainment, two fields which have rapid growth in the
U.S. and Europe during the post-war world.
Before 1970, the concept of credit cards have been known to everyone
and received quickly. 1966, Bank of American official authorized his release
BankAmerican card to other banks through agency contracts, beginning in

component is the international card organizations. Each subject plays an


important role in various maximize liquidity features modern cashless bank
card.
- International Card Organization is the head of all operations and
management of payment cards in our network. This is an association of financial
institutions, large credit -wide network and reach the famous brand and
diversified products such as card organizations Visa, MasterCard card issuers,
card companies American Express, JCB card companies, card company Diners
Club, Mondex company.... International card organizations offer basic
provisions regarding issuance and use of payment cards, play a mediating role
between the organization and the member companies of the adjustment and the
balance amount payments between member companies.
- The issuing bank is issuing banks themselves own branded card or
international card organizations, empowered card companies issue cards branded
by organizations and companies. The issuing bank is the bank named on the card
issued by the bank to show that its product. Issuing Bank specified terms and
conditions of use for the customer card. The Bank has the right to contract with
a third party agent is a bank or a financial institution for credit and payment card
issuing credit. If the name of the agent banks appear on the customer's card is
necessarily agent bank that is a member of the official organization card or
international card companies.
- Bank of Payment: Bank payment is accepted bank cards as a means of
payment by contract accepting the supply of goods and services in the area.
In fact, many banks are just issuing bank has a bank card payments. As
the issuing banks, their customers are also cardholders bank as payment,
customers are entities providing goods and services contracted merchant.
- Cardholders: Cardholders are individuals or authorized person (if
booked by the company is authorized to use) the card -issuing bank, the name

First, the bank card payment helps mobilize idle capital in the
population, which meet the needs of the economy: Payment by bank card to


facilitate capital raising activities of banks with cheap, this additional capital
banks can use to invest in service business. For example, if a card account has 3
million VND and we have 3.5 million cards issued, the Bank has mobilized
10,500 billion).
Second, the bank card help payment activities to become safe, fast and
save time: The card has facilitated the payment for goods and services safely and
effectively, accurate, reliable and time -saving, thereby creating public
confidence in the operation of the banking system. Besides, it does not take
money from the shipping cost place to the other to make the payment and reduce
the negative social vices.
Third, to contribute effectively implement national monetary policy:
bank card activity enhances circulation of money in the economy, increase the
rotation of the coin, unfreeze the different flows, creating important condition
for controlling the volume of payment transactions both residential and
economy, thereby paving the way for the calculation of the money supply and
the implementation of monetary policy to be effective....
For customers using cards (also known as card holder):
First, payment cards provide the convenience of paying for goods and
services in both card users in the country at home and abroad: Cards are created
with compact size, thus, cardholders can easily stored and transported anywhere,
anytime without any restrictions on space and geography. Cardholders can use
the card to pay for goods and services at merchant establishments across the
globe with great affordability.
Besides, with payment cards, cardholders can send the local currency but
will be targets of any currency if there is demand, the exchange rate of the bank
without going through the stage of transition exchange.

supermarkets, bookstores, restaurants - Hotels..., direct payment or auto
payment for service such as water, telephone, Internet fee,...; Buying prepaid
cards, payment directly through ATM...


With modern technology applied will have more convenience in the
payment card. The trend in the future, the card will become more versatile and
become the only thing to manage all transactions and banking services
1.2.2.2.The VISA credit
Using simple, time-saving, easy shopping anytime, anywhere: With the
card in the compact and simple operation, credit cards BIDV traded tens of
millions of ATM / POS, website with VISA logo is worldwide. Customers can
use the card to go shopping, travel, pay at the supermarket, shops, restaurants,
commercial centers, hotels, resorts... or to place an order online through the
Internet.
High security, maximum risk prevention fake cards: BIDV Precious,
Flexi is one of the most secure credit card nowadays cause it is integrated
magnetic stripe technology and EMV Chip cards (Standard payment smart cards
of 3 the world's largest Alliances are Europay, MasterCard and Visa offer). The
processor in the chip on a card to help protect the information card data,
ensuring secure transactions, security and risk prevention fake cards.

Source: BIDV Hanoi
1.2.2.3. Income from business card
As this is a service, card bank has brought many different incomes. First
of all, we have to mention the annual fee that must be paid by cardholders using
cards following the contract. The fee for the card number will be large relative
income of the bank. It is said that the bank always have benefit from card
transactions.



The participation fee into international card organizations: the amount is
fixed annually and follows the international card organizations rules.
The losses due to the risks arising...
In addition, if the bank does not release enough signed cards to organize
annual international card, the bank must also be fined an amount equivalent to
the contract issue.
We can see that, cards is very large business, therefore, cost management
is an indispensable task
1.3 The process of issuing bank card

1.3.1 The process of issuing card
Figure 1.1: The process of issuing

Branch
release

2

Card Center

3
1

4
Customers
(Cardholders)
Source: BIDV Hanoi

(1) Customers wishing to use a bank card to apply for the card. They


INTERNATIONAL ORGANIZATIONTỔ CHỨC THẺ QUỐC TẾ

7 - Debit

5 - reported

1 – muahànghoádịchvụ

3 - an advance

4bill transactons

bulletn board tradin

9 - Payment

CARD
HOLDER

PAYMEN
T BANK

CAU

Source: BIDV Hanoi
Activity card payments include the following steps:
(1) Cardholders buy goods and services at CAU.
(2) CAUs send the bill to the bank to pay.
(3) Bank gives advance payment for the merchant.