Thousands of Vietnam’s retail and service outlets charge an additional fee for customers who pay with credit card as a means of discouraging non-cash payments

In order to cover the electronic transaction fees deducted by banks during credit card payments, many merchants in Vietnam are topping off bills paid by credit card with an additional charge of 1.5 to 5 percent of the total transaction value.  

Retailers and service providers who are questioned by credit card users about the additional fee often explain it away as “collecting them on behalf of the banks.”

While such small percentages can make a big difference in the bottom lines of small businesses, these fees often discourage customers from paying with cash and bottleneck the government’s efforts to transform Vietnam into a cashless society.

At a jewelry shop in District 1, Ho Chi Minh City, customer Thanh Tu wanted to buy a bracelet for about VND4 million (US$170) but didn’t have enough cash on her.

Tu was surprised when the store owner told her she could pay by card, but would have to pay an addition fee to do so.

“The bank charges us [for this noncash payment] so we are just collecting the fee on its behalf,” the store owner told Tu.

But Tu refused to pay the fee and opted to search for an ATM and withdraw cash for the purchase.

Similarly, Duc Phuong, another Ho Chi Minh City resident, shared that a local computer shop told him that they charge customers an additional fee if they want to pay by card, saying that the store “is obligated to pay this fee to the bank.”

As Phuong did not have enough cash with him and didn’t know where the nearest ATM was, he chose to accept the fee and pay by credit card.

A man swipes his card for payment in this photo taken in Ho Chi Minh City. Photo: Tuoi Tre

Don't let the fees cloud benefits

From a merchant’s perspective, Nguyen Thi Thu Tra, the owner of a chain of seafood restaurants in Ho Chi Minh City, said cashless payments might be convenient for customers, but they eat into profits.

“The banks fees can be quite high for business owners,” Tra said, explaining that the “fees for card payments can be as high as five percent of the total charge for visa and mastercard and up to two percent for domestic debit cards.”

This means a business could have to pay up to VND50,000 ($2.1) if a customer pays for a VND1 million ($43) purchase by card, Tra told Tien Phong (Vanguard) newspaper.

“In the end, we’re the ones who get stuck paying the extra costs [as stipulated by the law],” she added.

However, credit card providers say merchants shouldn’t let added costs cloud the benefits of accepting cashless payments.

A representative of local lender Sacombank said banks often have promotional campaigns for cardholders, meaning people are more willing to pay by card and there is a wider pool of customers willing to spend money.

Businesses that refuse to accept non-cash payments could be missing out on these customers, the representative said.

The Sacombank representative also said banks are doing their best to make businesses understand the benefits and “will work with merchants who reject card payments by making such excuses as ‘the POS machines are broken’ or charging extra fees.”

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