Wednesday, April 23, 2008

Direct deposit does not always mean quick cash

Every payday night at the Vietnam – Singapore Industrial Park outside Ho Chi Minh City, hundreds of workers line up at ATMs to collect their pay, which is supposed to be in their accounts via direct deposit.
Some run straight to the machines while others hurriedly grab their bikes first, but no matter how quickly they arrive at the machine, there is always a crowd.
The government issued a resolution in August 2007 encouraging companies to start paying employees through direct deposit.
But for many workers, direct deposit has made getting salaries on time a difficult ordeal.
Vietnam has an estimated 4,000 ATMs, with about 2,400 located in Ho Chi Minh City and 1,000 others in Hanoi.
But the number is still small compared to the millions of cards being issued each year.
Many workers end up waiting for long hours only to face broken machines or ATMs that have already dispensed all their cash.
In some cases, salaries have not even been deposited.
Not being able to withdraw their money on time may mean not having meals on the table for their families the following day.
Tran Thi Hai is from the central highlands Dak Lak Province and works for Proceeding Co., Ltd. in the industrial park.
Her company was supposed to pay salaries via direct deposit at Vietcombank, she said, but most workers can’t get their money when they get off after the night shift as most ATMs have run dry after a long day of withdrawals.
Hai said she prefers getting paid in cash since her salary isn’t “large enough” to risk having it held up in a bank malfunction.
Thuy, an employee of Esquel Company, said that there had been a night when she had tried to get her money from several ATMs, all of which were broken or empty.
Her four-year-old daughter went unfed, Thuy said, and moneylenders she had borrowed from had already threatened her.
Huynh Song Hao, deputy director of Vietcombank’s HCMC branch, said the direct deposit system was first implemented because it wasn’t safe for workers to carry money home late at night.
Hao said that some workers tried to withdraw their salaries before payday, which is why some had found their accounts empty.
According to Hao, Vietcombank always transfers salaries on time, often one or two days earlier than payday.
He said the ATMs became overloaded when workers got “too desperate.”
Come together
In one move to tackle the problem, banks have been forming networks allowing card holders to withdrawfrom other network members’ machines.
According to Le Huynh Ha, chief of Vietcombank’s HCMC card service division, the state-run bank owns about 1,100 ATMs with an estimated 2.5 million cardholders.
The other 19 members in the Smartlink network, such as VP Bank and VIP Bank, only have 600 ATMs with about 500,000 cards in total.
Smartlink network management has said it will now require its members to set up one ATM for each additional 5,000 cardholders.
Nguyen Tu Anh, director of the Smartlink Card Service Joint Stock Co., said many banks join the network to attract customers, “but they rarely choose to invest in putting up more ATMs,” she added.
Tran Phuong Binh, general director of DongA Bank said the company plans to set up a large number of ATM in gas stations and install additional ATMs in suburban and non-metropolitan areas.
Hao said the number of Vietcombank ATMs increased nearly 40 percent over the last year.
Meanwhile, Kieu, another worker at the Vietnam-Singapore Industrial Park, said her siblings would not have enough to eat if she couldn’t withdraw money the night of her payday.
“The purpose of direct deposit is to encourage people to not use cash,” Tu Anh said.
“It’s the banks’ responsibility to ensure that this process goes smoothly
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