Is it mandatory to use chip-embedded ATM cards? Should you switch to chip-embedded ATM cards?

The transaction process on chip cards undergoes multiple authentication steps involving the card reader, the issuing bank, Mastercard/Visa organization, and the issuing bank. Each transaction is assigned a unique authentication code, ensuring data theft for card fraud is virtually impossible, thereby significantly enhancing security compared to magnetic stripe cards.

There are various ways to distinguish between magnetic stripe ATM cards and chip-embedded ATM cards. Specifically, the backside of a magnetic stripe ATM card contains a black magnetic stripe at the top, whereas chip-embedded ATM cards feature a small chip on the front.

When withdrawing cash from an ATM or conducting other transactions at a POS terminal, the device reads the personal information encoded in the black magnetic stripe on the back of the card. With this operating mechanism, the entirety of information on magnetic stripe ATM cards is susceptible to theft when hackers use regular card swiping devices.

As a result, chip-embedded ATM cards provide higher security for user information, giving you peace of mind when conducting transactions.

• What is a chip-embedded ATM card? The difference between magnetic stripe ATM cards and chip-embedded ATM cards.

2. Government issues decree on transitioning from magnetic stripe ATM cards to chip-embedded ATM cards

According to Article 1 of Circular 22/2020/TT-NHNN amending and supplementing some articles from Circular 19/2016/TT-NHNN, starting from March 31, 2021, banks will cease issuing magnetic stripe ATM cards and replace them with chip-embedded ATM cards. Therefore, all new ATM cards issued by banks nationwide will be chip-embedded.

As outlined in Circular 41/2016/TT-NHNN by the State Bank of Vietnam, all payment cards currently in circulation issued by card-issuing organizations throughout the territory of Vietnam must comply with domestic chip card standards to enhance security and ensure user safety.

Recently, many Vietnamese banks have sent notifications to users regarding the discontinuation of support for ATM cards with magnetic stripes and their non-acceptance at all transaction points nationwide from December 31, 2021, onwards, mandating replacement with new chip-embedded ATM cards.

• What should users take note of as magnetic stripe ATM cards face 'extinction' after December 31?

3. Should you switch to chip-embedded ATM cards?

Of course, the answer is a resounding yes. Firstly, when it comes to safety, chip cards outshine ATM cards by a significant margin. They are designed to thwart card information theft, encrypting data with high-security measures.

Every transaction with a chip card must undergo multiple verification steps, ensuring success only when authorized by relevant organizations. Compared to magnetic stripe cards, the process is much more complex but processing speed is remarkably fast, completing in just a few seconds.

Moreover, chip ATM cards can integrate numerous convenient features for users, including applications for non-cash payments across various sectors like transportation, insurance, healthcare, savings accounts, education, and public services.

Additionally, chip ATM cards can erase and rewrite information multiple times compared to magnetic stripe cards, which only store a fixed amount of data. This helps reduce the cost of purchasing blank cards when customers switch cards.

• What are the functions of chip ATM cards? Why switch to chip ATM cards?

4. Ways to transition to chip ATM cards

There are 2 common methods to switch from magnetic stripe cards to chip cards:

• Firstly, customers simply need to bring their valid ID card/passport/ID card to the bank's transaction point and request the conversion from magnetic stripe to chip card.
• Secondly, customers can access the bank's digital banking application, Mobile Banking, to initiate and receive the card at home or at the bank's transaction point.

For more details on transitioning to chip ATM cards, you can refer to this article:

• Chip ATM Card: Conversion process, usage, mandatory requirements,...

Currently, several banks have issued various types of chip-embedded international credit and debit cards. Prominent examples include VIB Bank, VietinBank, VietcomBank, Techcombank, ACB, Sacombank, Nam A Bank... Feel free to directly contact these banks for further consultation on chip cards.

Moreover, most banks nowadays offer free conversion services from magnetic stripe to chip cards, and they continue to roll out this service for free until the end of the year.

With the ongoing digitalization in society, using ATM cards has become a vital need for many. However, to ensure better security and encryption for user information, everyone should contact their bank to switch to chip ATM cards!

Above are the key things you need to know about chip ATM cards. If you have any further questions, feel free to leave a comment below or contact the bank you use for assistance!

Sources: CafeF, Hieuluat

See more: 

• How to register for home pension payment (ATM Card) on the Social Insurance Portal
• Hands-on with chip-embedded ATM card: Enhanced security, unchanged size
• Chip-embedded Citizen Identity Card (CCCD): Information, guidance, and verification methods