Racing bank ‘0 dong fee’

Many banks are adopting a completely free policy for transferring money, printing statements, and even withdrawing money offline at ATMs for customers.

Ms. Thu Huong said it was quite surprising that this morning, transferring money online was free instead of losing VND 8,800 for each transaction as before. This move of the bank will help her save relative money in the month. She reckons that each month she makes an online money transfer nearly a dozen times, withdraws money at an ATM no less than five times, not to mention printing a statement, … so the transaction fee can be up to several hundred thousand is normal.

For customers participating in e-commerce, making many bank transfer payments, the number of costs is many times higher. Therefore, the free banking services make many customers feel very happy.

This is not only happening in the bank where Ms. Huong is using but it is a trend that many banks have applied recently to attract customers. Accordingly, from November 15, Hong Leong Bank Vietnam will apply the new fee. Specifically, this bank will free off-line transfer at ATMs for non-priority customers, instead of charging VND 5,000 per transaction as before.

The bank’s shortened statement printing fee is also free of charge for both priority and non-preferred customers, while the previous fee was VND 20,000 per transaction.

Similarly, Tien Phong Bank (TPBank) announces the exemption of all online money transfer fees to all commercial banks in Vietnam when customers transact on Internet banking – TPBank eBank.

At the same time, when using TPBank cards to withdraw money at ATMs nationwide (except for some foreign banks such as HSBC, Standard Chartered, Vietnam – Russia joint venture banks), cardholders will not be charged.

At South Asia Bank, from now to December 31, 100% of cash withdrawal, money transfer and some other service fees will also be exempted for customers opening payment accounts and transactions at banks. For electronic banking channel, this bank is free to transfer within the system and inter-bank 24/7 and fees for Internet banking, SMS banking, Mobile banking and Open banking.

Ban Viet Bank also said that the fee for transferring money on Internet banking and Mobile banking will be exempted with a daily transaction limit of up to VND 1.5 billion within 3 months for ATM or credit cardholders of the bank. This registers and uses additional electronic banking services.

This race of fee exemptions and reductions not only takes place in the private banking sector, even “big players” like Vietcombank also enter the market. Accordingly, from November 15 to the end of 2020, Vietcombank domestic debit cardholders will receive a discount of VND 500 on every outward cash withdrawal. The new fee will be VND 2,500 per transaction, instead of VND 3,000 (excluding VAT) as before.

Previously, a series of banks had introduced policies on fee exemption and reduction for customers after Techcombank pioneered the “Zero Fee” policy for all online personal transactions from the end of September 2016 and Expand this policy to business customers from October 2018.

So, instead of increasing the service fee in a massive way like the previous “artisanal” type and having met with a lot of reactions from customers, now many banks have turned to free and reduced service charges to stimulate demand. demand for products and services and especially payment in the booming trend of non-cash payment channel.

Recognizing this development, financial experts said that the racing of free and reduced fees is a positive direction. Because the entire withdrawal and remittance fee is free, customers are encouraged to use the account for all personal payment needs. When customers regularly use accounts, they tend to maintain a higher account balance. Thereby, the bank attracted a lot of demand deposits.

And the greater the amount of demand deposits, the more it helps banks reduce their capital costs and increase profit margins. In addition, the maintenance of demand deposits by customers will help banks liquidity better, especially in the context that the State Bank tightens the ratio of short-term capital for medium-long-term loans to 40% and is expected decrease to 30% in the next two years.

On the other hand, the exemption and reduction of this service fee does not necessarily cause the bank to reduce revenue but sometimes more. Where it is easy to see is attracting a large number of customers to open a payment account, then the bank will have a large database and this is the platform for them to cross-sell products and services, insurance or loan.