“From June 1st, Transactions of This Kind Will Be a Thing of the Past for Some Banks; Attempting Them Will Result in Rejection”

As of June 1st, 2025, BacABank has officially ceased all transaction activities involving magnetic stripe cards, transitioning entirely to the use of chip cards. This update was recently communicated by the bank through its website and fanpage.

Compared to magnetic stripe cards, chip cards offer enhanced security with unique encryption for each transaction. Whenever a customer makes a payment, a random code is generated, which only the issuing bank can authenticate.

This mechanism mitigates the risks of information theft, card counterfeiting, and transaction fraud, which have long been inherent vulnerabilities of magnetic stripe technology. Thus, the shift to chip cards is not merely a bank requirement but also a necessary step to safeguard users in an increasingly digital and complex payment environment.

BacABank is not alone in this transition; in the coming months, a host of other commercial banks will also discontinue processing transactions through magnetic stripes. Vietcombank, for instance, has recently announced that it will terminate all payment activities related to magnetic stripes on cards (including the magnetic stripe on chip or contactless cards) from July 1st, 2025. This means that any cards still integrated with magnetic stripes, even if they have chips, will be rejected for transactions if they are not converted to the new standard.

Major banks such as Agribank, MB, SHB, and BaoViet Bank have also issued similar notices, encouraging customers to visit their branches to switch to domestic chip cards. These moves are in line with the plan outlined in Circular No. 18/2024/TT-NHNN dated June 28th, 2024, issued by the State Bank of Vietnam regarding bank card operations. Additionally, Official Dispatch No. 1099/NHNN-TT, promulgated on February 19th, 2025, mandates the discontinuation of magnetic stripe transactions to ensure information security and align with current technology standards.

The phase-out of magnetic stripe cards is a necessary step towards enhancing the safety of the financial and banking ecosystem while minimizing the risk of unintended financial losses due to technological loopholes exploited by malicious actors. However, to avoid any disruption in their banking services, customers are advised to proactively check the type of card they are using and, if it is still a magnetic stripe card or a chip card with a magnetic stripe, to visit their bank at their earliest convenience to initiate the conversion process.