Together with the dollar price increasing on both, the official and black markets, the foreign currency conversion fees have also escalated. This explains why people do not want to use international payment cards when traveling abroad as encouraged by the State Bank of Vietnam.
The Asia Commercial Bank ACB is now charging the foreign currency conversion fee of 6 percent, while it previously charged 3-4 percent only. The Shanghai and Banking Corporation HSBC, which previously charged 3 percent, has raised the fee to 4.5 percent. Meanwhile, since November 4, Techcombank has raised the fee on foreign currency spending management with Visa card from 3 percent to 3.49 percent of the transactions’ values (including VAT).
Since the State Bank of Vietnam decided to tighten the control over the foreign currency trade and vows to eliminate the black market, a lot of individuals have complained that they cannot buy dollars when traveling abroad or going on business. Banks refuse to sell dollars to them, reasoning the dollar short supply, while they cannot buy dollars on the black market, which is considered an illegal activity.
In order to settle the problem, the State Bank of Vietnam on March 12 released the document No 2033, requesting credit institutions to push up the providing of international payment card services, and encouraging individuals to use cards when they need foreign currencies to spend overseas.
However, people still keep indifferent to the suggestion by the central bank, simply because they have to pay high for withdrawing dollars from banks through cards. In many cases, the fees are even higher than the dollar prices on the black market, which explains why people still prefer buying dollars on the black market and bring cash with them when traveling abroad. The dollar price was reportedly at 21,400 dong per dollar on the black market on November 8, according to VnExpress newspaper.
The overly high fee clearly cannot encourage people to make payment through cards and keep card services unfamiliar to people.
Lan, a client of Techcombank, who has a Visa card, said that when using Visa and Master cards to withdraw foreign currencies in foreign countries, she has to pay two kinds of fees and interest rates, which include the cash withdrawing fee of 4 percent, and the foreign currency conversion fee of nearly 4 percent (when making payment in foreign countries, besides the money clients have to pay in accordance with the official exchange rates, clients still have to pay another money, which is equal to 4 percent of the total sums of money). Meanwhile, the interest rate is very high, about 23 percent at the lowest, or 0.064 percent per day).
With Visa Debit, if cardholders withdraw cash in foreign currencies, they will also have to pay the cash withdrawal fee and the foreign currency conversion fee, between 7 and 11 percent. All the kinds of fees make it much more expensive to spend dollars with cards than buying dollars on the black market. Besides, cardholders have to pay the annual fee of 300,000 dong and other kinds of fees.
At present, the dollar price on the black market is just 300-400 dong per dollar higher than the price quoted by commercial banks. “Therefore, I’d rather to buy dollars on the black market,” she said.
Meanwhile, Deputy General Director of ACB Nguyen Thanh Toai said the bank has no other choice than raising fees, because the previous fees could not offset the expenses. He said that the fee levels are just one of the reasons make people decide to use services. Even with high fees, clients would still use services if they can be served well.
The representative of HSBC also said that the adjustment of the fees is a normal move in banking operation. The fee adjustment allows banks to bring better solutions and services.
He went on to say that the new fees have been applying since November 1, while HSBC has noted that the number of clients who use the bank’s services remains stable.