Factors affecting the decision of customer at ho chi minh city i nthe using the credit card of joint stock commercial bank for investment and development of vietnam BIDV

RESEARCH PROJECT BMBR5103 FACTORS AFFECTING THE DECISION OF CUSTOMER AT HO CHI MINH CITY IN THE USING THE CREDIT CARD OF JOINT STOCK COMMERCIAL BANK FOR INVESTMENT AND DEVELOPMENT OF

RESEARCH PROJECT

(BMBR5103)

FACTORS AFFECTING THE DECISION OF CUSTOMER AT

HO CHI MINH CITY IN THE USING THE CREDIT CARD OF JOINT STOCK COMMERCIAL BANK FOR INVESTMENT

AND DEVELOPMENT OF VIETNAM (BIDV)

ACKNOWLEDGEMENTS

First of all, I would like to present my special thanks and my sincere gratitude to my advisor Doctor Bui Phi Hung for his constant guidance and advices He gave me a lot of valuable instructions which have been extremely useful for the completion of this dissertation I owe very special appreciation because of his academic support through the rough path that I have had from the beginning to the end of my dissertation

Moreover, I would like to express my sincere thanks to my colleagues who are working together with me at BIDV for their tremendous help in data collection and necessary knowledge in the implementing process

And I would also take this opportunity to express my gratefulness to all OUM professors, lecturers, tutors and staffs as well as my classmates for their collaboration during my studying period at MBA program

Finally, I would like to express the deepest gratitude to my family and friends, the people always encourage me during my education for the past two years

Thanks and best regards,

Nguyen Hoang Nam

I am fully aware that any breach of the above is considered as cheating and leads to the exclusion of my dissertation from the OUMMBA Program

ADVISOR’S ASSESSMENT

Advisor ’s Signature

TABLE OF CONTENT

Page

ACKNOWLEDGEMENTS 1

REASSURANCES 2

ADVISOR’S ASSESSMENT 3

TABLE OF CONTENT 4

EXECUTIVE SUMMARY 7

CHAPTER ONE: INTRODUCTION 8

1.1 Introduction: 8

1.2 Research aims and objectives 8

1.2.1 Research aims 8

1.2.2 Research objectives 9

1.3 Research questions: 9

1.4 Context and relevant 9

1.4.1 The BIDV’s background: 10

1.5 Scope of research 14

1.6 Limitations of research 14

1.7 Structure of research chapters 14

CHAPTER TWO: LITTERATURE REVIEW 16

2.1 Theoretical framework: 16

2.1.1 Theory of Reasoned Action (TRA): 16

2.1.2 Theory of Planned Behavior (TPB): 18

2.1.3 The Consumer Buying Behavior Patterns of Phillip Kotler: 19

2.2 The credit card 21

2.2.1 The definition of credit card 21

2.2.2 The related definitions about credit card: 23

2.3 The BIDV credit card: 24

2.3.1 The history of formation and development of BIDV 24

2.3.3 The consumer behavior 34

2.3.4 Overview of the Credit card in Vietnam at the moment: 36

CHAPTER THREE: METHODOLOGY 38

3.1 The research model: 38

3.2 Data collection: 41

3.3 Data analysis 42

3.4 Data processing and validating 49

CHAPTER FOUR: FINDINGS 51

4.1 Introduction 51

4.2 Frequencies descriptive statistics results: 51

4.3 Multi variable analysis 54

4.3.1 Descriptive statistic 54

4.3.2 Evaluating Scale Reliability (Cronbach’s Alpha) 56

4.3.3 Exploratory Factor Analysis (EFA) 59

CHAPTER FIVE: DISCUSSION 67

5.1 Introduction: 67

5.2 Key findings 67

5.2.1 The Credit card policy at BIDV and Vietnam (X1) 67

5.2.2 Knowledge about the credit card (X2) 68

5.2.3 The priority of payment by credit card (X3) 68

5.2.4 Significance of Credit card (X4) 68

5.2.5 Benefits from the credit card using (X5) 69

5.3 Adjustment of the conceptual framework 69

5.4 Regression analysis 70

5.4.1 Check on correlation assumption 70

5.4.2 Implementing Regression analysis 71

5.5 Conclusion 74

CHAPTER SIX: CONCLUSION 75

6.1 Introduction 75

6.2 Research key findings: 75

6.3 Implications of the research 76

6.3.1 The theoretical perspectives 76

6.3.2 The practical perspectives 76

6.4 Limitations of the research 77

6.5 The recommendations for the strategic orientation to develop the BIDV credit card 78

6.5.1 The Vietnamese Government 78

6.5.2 The BIDV 78

REFERENCES 81

APPENDICES 83

EXECUTIVE SUMMARY

The world is more and more integrated, that created for the businesses not only many opportunities but also challenges So all the businesses set the top target to maximize the profit and bring the highest economic efficiency To achieve that, this requires the managers have the practical measures in their business strategies

And one of the key strategies of the business is focusing on the sales process, especially is the customer behavior analysis The enterprises need to catch up the market trends and the

customer’s demands From this, they can build the strategic orientations to develop their

own products and services

The life is more and more modern, so the people’ needs are also increasing The strategies

to make the customer’s satisfaction take an important role in the development of

enterprises The launching the products and services which can meet the need of customers can helps businesses generate revenue to offset the expenses, thereby making the profit to serve the development

Therefore, the development in payment methods, especially though banks by cards cam help the customers minimize the risks and increase the convenience for not only the suppliers but also the consumers in the daily life

Thus, this research topic focus on “Factors affecting the decision of the customer at Ho Chi

Minh City in the using the credit card of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV)

CHAPTER ONE: INTRODUCTION 1.1 Introduction:

This chapter provides general information relating research aim and objectives, research question, context and relevant, scope and limitations of research as well as announces the structure of this study

1.2 Research aims and objectives

1.2.1 Research aims

Forms of payment by credit card has been present in Vietnam for over 10 years, but the interest of our customers for intelligent forms of payment in practice not be effective as expected This issue here is that there are a big amount citizens at Ho Chi Minh City prefers cash than card payment, especially credit card

From the real status of using credit card at HCM City, there are some inconveniences when the customers apply the credit card in the daily life such as:

- Many cards which is issued from many bank with a lot of kind of fees

- Many debts occur in the using process, maybe from the fees or the security policy,

the credit card information is exposed and used by a bad guy

The previous researches:

- Research model of the factors affecting the decision making and using ATM card

in Vietnam (2006) – Le The Gioi & Le Van Huy (Source:

http://doc.edu.vn/tai-dung-the-atm-tai-viet-nam-25012/)

lieu/mo-hinh-nghien-cuu-nhung-nhan-to-anh-huong-den-y-dinh-va-quyet-dinh-su Top 5 Factors Affecting Customers’ Choice of Credit Card Services - of Janet Jhon

(2011) (Source: affecting-customers-choice-of-credit-card-services.html)

http://www.articlesfactory.com/articles/finance/top-5-factors Okan Veli Safak (2007), Motivating factors of credit card usage and ownership:

evidence from Northern Cyprus, Economic research, Near East University, Turkey Because the previous researches are implemented in the period that the credit card was newly launched, the customer only knew domestic card So the researches about the

the issues of the research are implementing in the time when the credit card is used widely and popular Therefore, the research the factors affect to the decision using the credit card

of BIDV will help the method to help the customer control the risk in the using credit card, take the actions to improve the convenience of the credit card

1.2.2 Research objectives

- To evaluate the use of BIDV credit card of customer in the HCM City

- To systemize the knowledge about the credit card, the advantages and disadvantages

of BIDV credit card

- To analysis the factors affecting to the decision of the customer in using the BIDV

credit card from the reasons, purposes in thecredit card using process

- To propose some solutions for BIDV to widen the customer segments in the HCM

City in the development of the system of BIDV credit cards

 The specific objective

- To analysis the factors affecting to the customer’s behavior in decision to choose

BIDV credit card at Ho Chi Minh City

- From the result of the analysis, to propose the solution to improve the quality and

quantity of the BIDV credit card for the developing strategy of BIDV

1.3 Research questions:

- What are the factors affecting to the customer’s behavior in decision to choose

BIDV credit card at Ho Chi Minh City?

- What are the solutions to improve the quality and quantity of the BIDV credit card

for the developing strategy of BIDV?

1.4 Context and relevant

As Vietnam's economy integrates into the world economy, it has opened up the growth opportunities for the areas of social life, which includes the development of the field of Finance - Bank Vietnam has conducted open market in accordance with commitments to the world economic institutions Since then, the entry into the market of foreign banks, which have enough internal resources for capital and technology promise a fierce competition in the market of Finance - Bank of Vietnam Moreover, the reality in

Vietnamese commercial banks currently, credit is the highest proportion in the banking product and services that Vietnamese banks have to offer, and is also profitable products most to the Banks Therefore, the development of the banking products and services, including products about international credit card are one of the promising products bringing major source of profits for commercial banks in Vietnam in the future

The society is more and more developing, so the people’s income also increasing This

makes many demands of the people appearing in order to serve themselves and their family such as eat, drink, shopping, expanding the knowledge, etc However, the consumer

doesn’t always have enough financial capability to spend on their needs at all times even

though they have the stable income Besides, the carrying much cash is an obstacle for almost people because of unsafe psychological and inconvenience

Capturing this, not only BIDV but also the other banks apply the Credit card – a product

helps the consumer can purchase the goods and services at the supermarkets, stores, internet, etc The consumer only swipe or imprint to deduct the money in the accounts instead of paying in cash Especially, they can charge by card before and pay later in case

of the immediate shopping needs

In recent years, the credit card has attracted more attention from the consumer in HCM City The number of customers using BIDV cards increased significantly proves its usefulness for the shopping needs of consumers

1.4.1 The BIDV’s background:

The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV)

is one of the big commercial banks in Vietnam

As the longest-established bank in Vietnam, as of 31 December 2015, BIDV had total assets of more than VND850 trillion (~USD38.6 billion), making it the country’s largest

commercial bank

Full name: Joint Stock Commercial Bank for Investment and Development of Vietnam Abbreviated name: BIDV

Establishment: 26 April 1957

Tel: +84.4.2220.5544 - Fax: +84.4.2220.0399

Scope of business

Banking: BIDV has a wealth of experience in Vietnam, providing a full range of modern and convenient banking products and services including deposits, loans, trade finance, payment and account services, and card services and among others

Insurance: BIDV provides life and non-life insurance product bundles, tailored to the needs

of individual customers

Securities: BIDV provides a wide range of brokerage services, investment consultancy with the ability of quickly developing a system of order receiving agents nationwide Financial investment: BIDV contributes capital to establish companies for investment in key national projects and takes the lead in a number of significant projects such as Vietnam Aircraft Leasing Company

Position

BIDV is always at the forefront of implementing major economic and monetary policies

of the Government and the State Bank of Vietnam BIDV’s total assets, outstanding loans

and deposits in 2015 were higher than those of key competitors, making it the leading bank among commercial banks

Human resources

With 24,000 officers, employees and financial consultants who are qualified and trained with full experience and have been accumulated and transferred for over half of a century, BIDV always brings its customers the benefits and reliability

well-Customers base

Corporates: BIDV has established relations with nearly 200,000 corporate customers including groups, corporations, and small and medium-sized enterprises from all economic sectors

Financial institutions: BIDV has established correspondent relationships with nearly 1,700 financial institutions both local and international The bank is the trusted choice of major international organizations including the World Bank, ADB, JBIC and NIB

Individuals: 7.7 million individual customers currently use products and services of BIDV

Technology

BIDV is leading the way in the Vietnamese banking system in the application of modern technology Since 2007, the bank has ranked first in terms of readiness for IT implementation among Vietnamese commercial banks

Commercial banking: As of 30 June 2016, BIDV’s network included 190 branches, 815

transaction offices, and nearly 32,000 ATM/POS covering 63 cities and provinces in Vietnam, and one branch in Yangon, Myanmar

Subsidiaries: BIDV Securities Joint Stock Company (BSC), BIDV Insurance Corporation (BIC), BIDV Financial Leasing Liability Limited Company (BLC), BIDV Asset Management Company (BAMC), and companies of which BIDV is the founder such as Vietnam Aircraft Leasing Company (VALC)

Joint venture banks: Lao-Viet Bank (with Lao partner), Vietnam-Russia Bank (with Russian partner), BIDV Tower Joint Venture Company (with Singaporean partner), BIDV- Vietnam Partner Investment Management Joint Venture Company - BVIM (with US partner), BIDV MetLie Life Insurance Limited Liability Company (with US partner), etc Overseas representative offices: in Cambodia, Laos, Myanmar, the Czech Republic, Russia and Taiwan (China)

1.4.2 The BIDV credit card:

The BIDV credit card is an international credit card to help you to shop immediately and pay at any time Cards are accepted at thousands at card acceptance agents and millions points over the world

- BIDV Visa Flexi

- BIDV Visa Precious

- BIDV Visa Premier

- BIDV Visa Platinum

- BIDV Visa ManU

- BIDV Vietravel MasterCard Standard

- BIDV Vietravel MasterCard Platinum

- BIDV MasterCard Platinum

The application of a credit card of banks in general and of BIDV in particular can bring back for the customer the benefits as follows:

- Always ready to use: You need to replace the new washing machine or buy a product

on the online shopping? Credit cards are useful when you're in an emergency and need a large amount of money Then you have to pay back

- Privacy: Losing money does not mean reclaim it When a credit card is lost, you can

always cancel the card If notified promptly about the loss of the card or the card is stolen, you will not be responsible for unauthorized payments

- Keep papers related to tags: credit card subsidiary ledgers statement is one of the

documents to statistics monthly spending and will be helpful for budgeting

- Convenience: Credit cards are accepted at more shopping sites, using credit cards is

a lot faster as well

- Bill Payments: Invoices for monthly expenses such as electricity, water, etc can be

paid directly by credit card

- Promotion: Use your credit card, cardholders can get a lot of deals, as well as

participating in attractive promotions such as free travel

However, the using credit card also has some drawbacks such as the type of fees and interest rates To use a credit card wisely, you should be aware of these costs to reasonable adjustments Track your expenses and make sure you can pay off credit debt on time every month

Because of these reasons, the study about Factors affecting the decision of the customer

at Ho Chi Minh City in the using the credit card of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) is practical and necessary for the

Business strategy of BIDV

1.5 Scope of research

The research result of the dissertation will determine more fully and exactly about the factors affecting to the decision of the customer at Ho Chi Minh City in the using the credit card of BIDV, also the affecting level of each factor From this, BIDV can build the strategic orientations in order to develop the credit card for each market segments and have the suitable solution for the issues which still exist This is the one of the benefits to enhance the competitive ability of BIDV in the context which the Vietnamese economy is developing and deeply integrating with the global economy

1.7 Structure of research chapters

Besides the introduction and conclusion, the structure of the dissertation includes 06 chapters as the following:

- Chapter 1: Introduction - The chapter provides general information of research states

the aim and objective, rationale of choosing topic, significance of research, research methodology and outlines overall research

- Chapter 2: Literature review (Concepts, definitions about the credit card and customer

behavior, theoretical framework, theoretical models, research hypothesis) about the research issue: Factors affecting the decision of the customer at Ho Chi Minh City in the using the credit card of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV)

- Chapter 4: Findings - Data analysis Evaluating the affecting level of each factor in

the research model

- Chapter 5: Discussion

- Chapter 6: Recommendation, orientation and strategy to develop the BIDV credit card Limitations of research

CHAPTER TWO: LITTERATURE REVIEW 2.1 Theoretical framework:

2.1.1 Theory of Reasoned Action (TRA):

TRA model was built in 1967, corrected and expanded from the early 1970s by Ajzen and Fishbein This model describes a comprehensive arrangement of the attitude components which are unified into a structure in order to lead to the better prediction and explanation about the behavior This theory consolidated ingredients in awareness, preference and buying trends The components of TRA consist of three structures: The behavioral intention (BI), the attitude (A) and the subjective norm (SN) TRA model shows that the behavior intention depends on the behavioral attitude and subjective norm (BI = A + SN)

Figure 2.1: Theory of Reasoned Action model – TRA

Source: Adapted from Ajzen,I and Fishbein, M., Understanding Attitudes and Predicting Social Behavior (Upper Saddle River, NJ: Prentice Hall, 1980)

In Schifman, L.G and Kanuk, L.L., Consumer Behavior, 9th Edition, Pearson,

The attitude in TRA model can be measured similar to the attitude in the multi-attribute model The consumer sees the services as a set of attributes with the ability to bring the benefits and satisfy different needs They will have the most attention to the attributes which will bring them the most benefits The consumer usually considers a number of attributes and evaluates them with the different important level If we know the level

of importance which the consumer assigns to the attributes, we can predict their choices more certainly

To understand the buying trend, we must measure the subjective standard components that affect the buying trends of consumers Subjective standards can be measured directly through the measurement of consumer feelings toward those who are related (such as family, friends, colleagues, etc.) These people will think about the buying plan of customer, like or dislike him or her buy that service This is a reflection of the formation of their subjective attitude The degree in attitude of related people depends

on two things: (1) the intensity of opposed or supported attitudes of related people affects to the decision of the consumer and (2) the consumer's motives follow the wishes of those people If the opposed attitude of the related people is strong and the consumer is close to them, there will be more ability that the consumer adjust the decision when they buy or use the product and service And vice versa, the level of favorite of consumer for product or service will increase if the related people support them to buy or use the product and service with positive attitude

In the simplest form, the relationship can be expressed as the following equation:

Inside:

 BI: behavioral intention

 AB: attitude toward the behavior

 SN: subjective norm

 Wi: experimental weigh

Understanding this theory can explain clearly the relationship between the elements which affect to the buying intention and behavior of consumers

2.1.2 Theory of Planned Behavior (TPB):

TPB model (Ajzen, 1991) was developed from the Theory of Reasoned Action model

– TRA The theory assumed that the behavior can be predicted or explained by the

intention to perform behavior The intention is assumed to include factors that affect to behaviors, and is defined as the degree of effort that people try to perform the behavior (Ajzen, 1991) Intention is a function of three influencing factors as follows:

TPB model shows the relationship between three factors on behavioral intention:

(1) The attitude toward the behavior, which is conceptualized as a positive or negative

assessment of an individual about performing behavior

(2) The subjective norms, which mentions to the elements can affect the

implementation or non-implementation of the behavior by the individual’s feeling

(3) The perceived behavioral control, which is defined as the assessment of the

individual about the degree of difficult or ease to implement that behavior Ajzen (1991) suggest that the cognitive factors control the behavior which impacts directly intention to perform the behavior And if that individual is exact in the perceived

behavioral control, this can help to predict intention and behavior

Figure 2.2: Theory of Planned Behavior model – TPB

 BI: behavioral intention

 AB: attitude toward the behavior

2.1.3 The Consumer Buying Behavior Patterns of Phillip Kotler:

Phillip Kotler analyzed consumer buying behavior based on the stimuli consist of the 4Ps: product, price, place, and promotion Other stimuli include major forces and events in the

buyer’s environment: economic, technological, political, and cultural All these inputs enter the buyer’s black box, where they are turned into a set of buyer responses: the buyer’s brand and company relationship behavior and what he or she buys, when, where,

and how often

We want to understand how the stimuli are changed into responses inside the consumer’s black box, which has two parts First, the buyer’s characteristics influence how he or she perceives and reacts to the stimuli Second, the buyer’s decision process itself affects his

or her behavior We look first at buyer characteristics as they affect buyer behavior and then discuss the buyer decision process

Figure 2.3: Model of Buyer Behavior

Consumers make many buying decisions every day, and the buying decision is the focal

point of the marketer’s effort Most of large company research consumer buying decisions

in great detail to answer questions about what consumers buy, where they buy, how and how much they buy, when they buy, and why they buy Marketers can study actual consumer purchases to find out what they buy, where, and how much But learning about the whys of consumer buying behavior is not so easy—the answers are often locked deep within the consumer’s mind Often, consumers themselves don’t know exactly what influences their purchases “The human mind doesn’t work in a linear way,” says one marketing expert “The idea that the mind is a computer with storage compartments where

brands or logos or recognizable packages are stored in clearly marked folders that can be accessed by cleverly written ads or commercials simply doesn’t exist Instead, the mind is

a whirling, swirling, jumbled mass of neurons bouncing around, colliding and continuously creating new concepts and thoughts and relationships inside every single

person’s brain all over the world.”3 The central question for marketers is as follows: How

do consumers respond to various marketing efforts the company might use? The starting point is the stimulus-response model of buyer behavior shown in Figure 1.3 This figure shows that marketing and other stimuli enter the consumer’s “black box” and produce certain responses Marketers must figure out what is in the buyer’s black box Marketing

stimuli consist of the four Ps: product, price, place, and promotion Other stimuli include major forces and events in the buyer’s environment: economic, technological, political, and cultural All these inputs enter the buyer’s black box, where they are turned into a set

of buyer responses: the buyer’s brand and company relationship behavior and what he or

she buys, when, where, and how often

2.2 The credit card

2.2.1 The definition of credit card

Credit card, is defined by Investopedia, is a card issued by a financial company giving the holder an option to borrow funds, usually at point of sale Credit cards charge interest and are primarily used for short-term financing Interest usually begins one month after a purchase is made, and borrowing limits are pre-set according to the individual’s credit

So the specific definition of the credit card is a tool of non-cash payment, which allows the card holder spend before and pay after The time between when the card is used to pay for the purchase of goods or services until the cardholder pays for the bank depending on the credit cards of different banks and credit organizations If the card holder pays all the outstanding balance on the due date, this time will become the grace period and the cardholder is fully exempted interest But if the outstanding balance has not been paid at maturity date, the cardholder will have to pay interest and penalty fees When all incurred amount is reimbursed to the bank, the limit of credit card is restored as the original This is the revolving feature of the credit card

Financial institutions such as banks or financial companies issuing credit cards to customers based on credibility and financial ability to ensure payment of each customer

Financial ability to ensure payment is determined based on the synthesis of different information such as income, expenditure situation, existing relationships with financial institutions, social status, etc of customer Therefore, each cardholder has different credit card limits Also from the evaluation and classification of customers, the banks and financial institutions offer the varied credit card products like Visa, MasterCard, etc When using cards instead of cash, the cardholders present their credit card at the point of supply of goods and services which accept cards (known as card-accepting units) for payment

Moreover, if your products are offered for sale online, the customers will prefer to purchase immediately on the network than other methods such as cash So the payment by credit card is essential in e-commerce And the online payment by the credit card also has the benefits for the customer, as following:

- Fast capital turnaround time: When customers pay by credit card, the providers or

sales agents will receive money within a few days rather than several weeks In regular transactions, the sellers always wait customer pay, then wait the post office send the transaction notice to the bank and bank have to process the payment before receive money But if owning a bank account and setting up a POS, the inconveniences will disappear and the seller almost immediately took the money in hand Just no more than five days, the amount of payment will reach you from the bank

- Instant satisfaction: When the customers can buy a certain item quickly, they tend

to continue to do so The purchases are easier, people increasingly prefer to maintain

it

- Stimulating the increasing in purchases: The customers have trend to purchases

online if the sellers apply the payment policy by credit card They can buy anything and use the utilities immediately, even the cheap products and large amount

- Currency converting ability: When the customers come from many place over the

world or travel abroad, the currency conversion will be a real obstacle However,

the credit cards have the ability to perform this function immediately and both you and your clients will not waste the time

- Helping to consume the expensive goods faster: nowadays, with the expensive

goods, many stores and agencies have the installment policy for the customers Instead of paying all money in one time, the customer can pay by credit card in many periods such as 6 months or one year with the 0% interest rate

- Increasing the attractiveness: Although many people are still accustomed to only

cash for payment when they receive the good, most of online shoppers have in hand

a credit card and prefer to pay by credit card Without applying this payment method, there will be a big amount of potential customers will be lost

2.2.2 The related definitions about credit card:

- Bank: the Commercial Joint Stock Banks is authorized to issue and supply card

payment services

- Branch: the smaller part of banks, perform the evaluation functions, credit allocation

and debt management within region as province, district, etc

- Card center: the card service center of bank

- Credit card: is card which is issued by a bank for the customer Each card has a

credit limit used for customer to withdraw cash, pay for the online services, make a number of services at ATM machines and the POS unit, included domestic and international credit card

- Cardholder: is individual or organization which is card-issued by bank, included

main cardholder and supplementary cardholder

- ATM: the Automatic Teller Machine, a banking equipment helps the cardholder can

use to withdraw cash or perform some other service provided by the bank

- Card transaction: the transactions that cardholder use the credit card at the POS unit

- PIN: the security code which the cardholder select to use in the transaction,

including 4 digits and is automatically registered on the management system of the bank card

- POS: Point of Sale – the point which accept the card payment

- Credit card limit: the transaction limit is issued by bank for the cardholder to use in

a certain time

- Cash withdraw limit: is the cash limit which the cardholder is allowed to withdraw

from the credit card limit

- Card account: the account which is opened at the bank for managing the

transactions, fees and interest related the card using; main cardholder and supplementary cardholders use one account

- Transaction announcement: the document which the bank send to the cardholder,

detailed list the incurred related the card account include the cash withdraw, payments in the period and the amount of the minimum payment for this period

- Outstanding balance: the outstanding balance on the card account of the cardholder

including the value of transactions, fees and interest related to the use of the card is listed in the monthly transaction announcement

- The amount of the minimum payment: is the minimum amount the cardholder must

pay to banks for each period in order to maintain the debt status

- Due Date: is the last day the cardholder pay for bank the debit balance as prescribed

- Credit card interest rate: is the interest rate is applied for cardholder, included the

in-term interest rate and overdue interest rate

2.3 The BIDV credit card:

2.3.1 The history of formation and development of BIDV

- Founded on 26 April 1957 under the name of Bank for Construction of Vietnam

- From 1981 to 1989: renamed Bank for Investment and Construction of Vietnam

- From 1990 to 27 April 2012: renamed Bank for Investment and Development of

Vietnam (BIDV)

- Since 27 April 2012: equitized and renamed Joint Stock Commercial Bank for

Investment and Development of Vietnam (BIDV)

BIDV has received a lot of noble honors and rewards from the Party and State for its contributions including First-class and third-class Independence Medals; First-

class, second-class and third-class Labor Medals, Labor Hero in the renovation period, Ho Chi Minh Medal, etc

I Bank for Construction of Vietnam (1957 - 1981)

Founded when the country was active in the period of economic recovery, the Bank for Construction of Vietnam made important contributions to the management and allocation

of capital for construction Right from the first year, the bank provided capital for hundreds of works, contributing to balance accounts, facilitating market management and price stability

The Bank for Construction of Vietnam allocated capital for building industrial facilities

and construction projects to serve national welfare and people’s livelihoods, contributing

to changing the face of North Vietnam The Bank and the Vietnamese people worked together to complete the tasks of construction in wartime, supplied capital for air defense projects, traffic projects and relocation of important industrial factories

In the period 1975 – 1981, the Bank joined to renovate economic facilities in the South

and develop new infrastructure after the war The bank provided capital for industrial, agricultural, transportation, public welfare projects, and key projects critical for the national economy

II Bank for Investment and Construction of Vietnam (1981 – 1990)

In the period 1981 - 1990, the Bank for Investment and Construction of Vietnam gradually overcame difficulties and improved operational mechanism for continued development This was also the period when the bank made strong movements in line with the national renovation in general and the banking sector in particular, progressively becoming one of the leading specialized banks in the country

III Bank for Investment and Development of Vietnam (1990 – 27 April 2012)

Thanks to uniform solutions, BIDV in the period 1990 – 2000 made positive

developments, specifically:

BIDV was proactive and pioneering to employ ways to mobilize capital denominated in VND and foreign currencies In addition to raising capital domestically, BIDV also mobilized capital from foreign countries through various forms of loans such as

commercial loans, syndicated loans, loans under trade agreements, long-term syndicated loans, export finance, co-financing and guarantee, etc., creating huge capital volume for national investment and development

Following the Government’s policy on developing stronger and more comprehensive

economic, trade and investment cooperation between Vietnam and Laos, BIDV coordinated with Banque Pour Le Commerce Exterieur Lao Public (BCEL) to establish Laos – Viet Joint Venture Bank with the aim of “contributing to the economic

development and financial and banking system of Laos; supporting trade relations between the two countries, thereby contributing to promoting the comprehensive economic cooperation between the two countries

In 1998, following directions of the Government and the Governor of the State bank of Vietnam joined to form a committee to handle the debts and assets of Nam Do Bank

As the leading bank to establish a joint venture bank with a foreign partner, in May 1992 BIDV established VID Public Bank headquartered in Hanoi and branches in Ho Chi Minh City, Hai Phong, Da Nang VID Public was the first joint venture bank in Vietnam and operated efficiently, receiving merit certificates from the State Bank of Vietnam

During the period 1990 - 2000, the Bank for Investment and Development of Vietnam made strong IT developments The bank developed new products such as Home Banking, ATM, and received positive feedbacks

BIDV has sustained high, safe and effective growth In the period 2006 - 2010, total assets increased more than 25% per year on average, capital mobilization up 24% per year, outstanding loans up 25% per year and pretax profit up 45% per year

BIDV has actively been transparent for its business, pioneering to apply international standards Since 1996, BIDV has been audited by independent international auditors In

2006, BIDV was the first bank to have Moody's investor’s services implement credit

rating Also in 2006, with the support from Ernst & Young, BIDV was the commercial bank to pioneer in implementing the internal credit ratings

BIDV continuously expanded its network to serve business activities As of 25 November

2015, the bank had 180 branches, 780 transaction offices and thousands of ATMs and POS in all 63 provinces and cities across the country

BIDV always pays attention to people development BIDV continued to recruit young human resources with knowledge and skills to meet the integration requirements

Implementing the strategy of multilateral economic cooperation and market expansion, BIDV established joint ventures including: VID Public Bank (with Malaysian partner in 1992), Lao-Viet Bank (1999), Laos-Viet Insurance (2008), Vietnam-Russia Bank (2006), BIDV-Vietnam Partners Investment Management JVC – BVIM (with US partner in

2006), BIDV Tower Company (with Singaporean partner in 2005), investment fund management companies in Hong Kong and established a representative office in the Czech Republic With the investments in Laos on all three sectors: Banking, Insurance and Financial Investment, BIDV and its Laotian partners formed an effective bridge for economic, trade and investment relations between the two countries

Given the bank successes in international cooperation, BIDV was trusted by the Government to implement cooperation and investment activities in Cambodia In 2009, BIDV took the lead in investment and business activities in the fields of finance, banking, insurance, and securities in Cambodia, establishing a representative office in Cambodia, Cambodia Investment and Development Company (IDCC), the Bank for Investment and Development of Cambodia Plc (BIDC) and Cambodia-Vietnam Insurance Company, Cambodia-Vietnam Securities Company (CVS)

IV Joint Stock Commercial Bank for Investment and Development of Vietnam (27 April 2012 - present)

BIDV was equitized according to the direction of the Government, ensuring the harmony

in the interests of the State, enterprises, investors and employees On 27 April 2012, BIDV officially transformed into the Joint Stock Commercial Bank for Investment and Development of Vietnam and has been listed on the stock exchange since January 2014

On 25 May 2015, BIDV officially merged with Mekong Housing Bank (MHB), marking

a milestone in the network expansion

As the pioneer in foreign operations, by the end of 2014, BIDV established correspondent relationship with over 1,700 banks and bank branches in 122 countries and territories around the world In addition, the bank was entrusted by multilateral and bilateral donors (WB, ADB, OPEC, AFD, Germany, France, Japan) for over 150 ODA projects with total committed fund of over USD4 billion

BIDV’s commercial presences in foreign countries continue to affirm BIDV position and

brand BIDV expanded trade and investment promotion in potential markets such as Russia, Europe, Northeast Asia and made important strides in penetrating the Japanese

market; establishing BIDV MetLife Life Insurance joint venture with US’s global life

insurer MetLife

BIDV established its research center in 2012 to support the development and implementation of policies and solutions for the bank operations and provide economic and monetary consultancy to the Government, ministries and local authorities

BIDV – An enterprise for community

BIDV has made positive contributions to the community development In 5 years alone (2004 -2008), BIDV donated VND106.5 billion in the areas of health, education, building houses for the poor, disaster relief, etc

In the period 2010-2014, the bank continued to show responsibility for community development through various social security projects and programs across the country with a total budget of more than VND 1,200 billion

BIDV also took a key role in mobilizing the business community to donate for social security in Laos, Cambodia, Myanmar, Cuba, among others

 Organizational structure:

 Organization:

Figure 2.4: The Organization of BIDV

(Source: www.BIDV.com.vn)

2.3.2 The BIDV credit card:

The BIDV credit card is an international credit card to help you to shop immediately and pay at any time Cards are accepted at thousands card acceptance agents and millions points over the world

Figure 2.7: The BIDV ’s Credit cards

2.3.2.1 Introduction about BIDV credit cards:

 Advantages of BIDV credit cards

Optimal utility

- Spend first, pay later with interest-free period of up to 45 days

- Global payment acceptance at millions of ATMs / POS, website icons Visa /

MasterCard worldwide

- Share utilities of BIDV credit cards with relatives through supplementary card, credit

limit and transaction limit of the supplementary card is always in control of the card holder

- Instantly manage and control transactions of primary and supplementary cards through

services BSMS

- Automatic debit services performes monthly payment for loans so that the cardholder

does not need to come to the bank In addition, customers can transfer from any bank and foreign credit card for debit payments to the Bank

- 24/7 support services to meet all customers’ requirements or questions about products

and services relating credit card BIDV

Privilege

- Comprehensive life support for MasterCard Platinum credit card holders and medical

travel assistance for credit card holders Precious

- Card Shield comprehensive insurance for Platinum MasterCard cardholders and

Precious

- Incentive or discounts programs when using your credit card at the point of preferential

BIDV BIDV, Visa and MasterCard

Assurance

- Maximum information security for cardholders, risk prevention fake card with

integrated technology from card and EMV chip cards over credit cards BIDV

- Brings peace of mind to cardholders anywhere in the world with customer service

support 24/7

 General provisions:

- Product Type: International credit cards with Visa or Mastercard

- Technology cards: chip cards and EMV compliant card, embossed

- Card validity period: 3 years

- Maximum number of supplementary cards: 02 cards

- Credit limit: from 10 million or more

 Conditions for issueing a credit cards: use 1 of the following 3 options

- Secured by income: income customer average monthly demonstrated from 4 million /

month or more will be considered for credit card limit

- Secured by assets: customer pledge / mortgage of security assets upon BIDV’s

regulations, such as:

+ Deposit cash, valuable papers / savings book by BIDV and other organizations released

+ Land use rights, housing, construction work on the land are mortgaged to the Bank+ New or used Cars, which is mortgaged to the Bank

- Secured by combining 2 above secured forms – combining income & assets

 Change limit credit

- BIDV will annually re-assess the credit limit of customers and proactively adapted

- Customers want to change the credit limit (increase or decrease) may submit written

request to the Bank at any given time We will review and approval if the request is

valid

2.3.2.2 Detail information about the BIDV credit cards

BIDV has implemented VISA and MasterCard international cards with the card brands:

Visa Precious BIDV, BIDV Flexi Visa, Visa Platinum BIDV, BIDV Ready MasterCard,

Platinum MasterCard BIDV, and the co-branded card products with domestic and oversea

organizations: BIDV Vietravel Mastercard Platinium, BIDV Vietravel Mastercard

standard, BIDV Visa Manchester United

The detail information about the BIDV credit cards:

BIDV Visa

Premier

BIDV Visa Platinum

BIDV MasterCard Platinum

BIDV Viettravel MasterCard Platinum

BIDV Visa Precious

BIDV Visa

MU

BIDV Visa Flexi

BIDV Viettravel MasterCard Standard

>= 80 million

>= 50 million

Income from 20 million or having asset

Income from 20 million or having asset

Income from

4 million or having asset

Income from

4 million or having asset

Income from 2million or having asset

Income from 2 million or having asset

Rate 15% per

year

15% per year

15% per year

15% per year

16,5% per year

18% per year 18% per year 18% per

year Annual Fee

1.000.000 600.000

Free for the

1 st year

500.000 250.000

300.000 150.000

400.000 200.000

200.000 100.000

Free for the

1 st year

300.000 150.000 Bonus point

accumulation

When customers make shopping using BIDV credit cards, customers will accrue points corresponding to the number of sales transactions Accumulated bonus points can be converted into miles bonus or reimbursement of Vietnam Airlines which is pai d to customer’s credit card account or customer’s

accounts Golden Lotus (GLP) based on BIDV’s policies in each period

Golf club  

2.3.3 The consumer behavior

Commerce is changing rapidly, and the pace is unlikely to slow down in 2016 According

to Shelby Walsh, there are five trends that will change consumer behavior in 2016, as the

follows:

- Automated creation: Funding an idea has been made exponentially easier with crowd

funding sites like Indiegogo and Kickstarter, but a new cohort of businesses being

created are looking to draw upon vast, active communities in various industries to help

produce a product For example, if you’re keen on launching an app or

website, FiftyThree Paper’s Mix app is where you should head first A place where

designers and artists come together, Mix serves as an endless resource for inspiration,

offering a wide range of tutorials to advance your skills and templates to get your digital

product off the ground

- Curated dining Ready-made is still not a sexy term, but that doesn’t mean consumers

aren’t looking for shortcuts Services like Chef’s Plate offer people the chance to cook

gourmet meals without all of the fuss The service ships ingredients and instructions so

that anyone can prepare a healthy homemade meal hand-selected by executive chef

Jason Rosso of Milestones Canada

- Resource sharing and community building: Consumers care about the global

community and want to know that the brands they purchase from do, too Social Feed is

satisfying the push for responsible business by allowing brands to buy media that make

a real impact on people’s lives in South Africa Brands sign up for Social Feed and post

advertisements or content they’d like shared Consumers can pick which ads or pieces

a meal goes to a child in need The more exposure for the brand, the more meals distributed – it’s a feel-good situation all around In 2016, we’ll be seeing more

businesses align with environmental, social and even political causes to appeal to a mounting pressure for brands to authentically stand for something greater than the products they sell

- Streamlined feedback: As the pace of consumer needs quickens, brands have to rely

on new technologies to get feedback and insight about where they are both over and underperforming and what they can push on Co-Operative Food’s smart shopping carts

are complete with tablets that prompt shoppers to answer various questions ranging from their thoughts on store layout to sustainability Shaftsbury, on the other hand, is using iBeacon technology to provide retailers with data such as the number of people who pass by their shop versus the number who go in to check it out

- Recognition purchasing: Brick and mortar and e-commerce have been fiercely

competing over the past handful of years, but the line between the two has become increasingly blurred One Canadian business is really trying to take the shopping experience to the next level Well.ca created a completely virtual store at Toronto’s

Union Station, where passersby could scan the QR code of any product pictured on the wall to purchase Slyce, another Canadian-based company, also provides consumers with a convenient way to purchase Just take a picture of a product in a store, and its visual product search technology will allow you to immediately purchase that item from your smartphone

Moreover, the procurement capacity of Vietnam is growing every day Since the utility of infrastructure as well as social connections conveniently, that makes the changes in consumer behavior There are four trends in customer behavior which the corporations need to focus on, as follows:

- First, consumers now have the ability to self-reliance in the procurement since the

explosion of the middle class is going on strongly at Asia in general and Vietnam in particular In 2020, the middle class in Vietnam will triple the current, reach figure of

33 million people

- Secondly, the younger generations are now independently sooner, so will lead to the

shopping for themselves rather than for family as the years ago Though the first priority of the consumer, Vietnam was set aside money in savings, but spending for these products for better quality of life as technology products, automobiles and utility products such as refrigerators, television and travel is increased markedly in recent years

- Thirdly, consumers become "always be active", so they prefer convenient products or

services which is the best for their busy lives

- Finally, the Vietnamese consumers are always in high demand to be connected to the

Internet anytime, anywhere

Figure 2.8: Four Trends of Customer behavior in 2016

Higher

procurement

Shopping for selves

"Always be

active”

High demand to be connected

2.3.4 Overview of the Credit card in Vietnam at the moment:

Bank card market in our country is developing evenly on all sides as issuance, payment, card use and network development

According to Vietnam Banking Association (VBA), up to now, the Vietnamese card market has made remarkable developing steps Over the years, credit cards, especially the international credit card always take high percentage of the total market of cards issued

On the 31/12/2015, there are 40 in 51 banks at Vietnam issuing the international credit

million cards on 31/12/2015, up 16.23% compared to 2014, in which groups of foreign banks issued more than 645,000 cards

Along with the increase in the number of credit cards, the card sales and card payment sales also grow constantly In 2011, the card sales reached more than 724,000 billion VND and card payment sales reached more than 895,000 billion VND And these figures are respectively more than 1,637,000 billion VND and more than 1,685,000 billion VND, growth respectively 126% and 88%

Moreover, the automatic channel and ATM transactions grew slightly as banks redirect to focus on developing network of POS units To the end of 2015, the whole financial market had 16,573 ATMs and 217,470 POS machines, grew respectively 23% and 181% compared

to 2011 This is the foundation for the developing of credit card in the future

CHAPTER THREE: METHODOLOGY 3.1 The research model:

Based on the theoretical model and the relevant research presented in the previous section, the research model of Factors affecting the decision of the customer at Ho Chi Minh City using the credit card of the Joint Stock Commercial Bank for Investment and Development

of Vietnam (BIDV) is as follows:

Figure 3.1: The proposed research model for dissertation

The research model is built based on the Theory of Planned Behavior (TPB) The decision

is affected by the behavioral intention, which includes three factors: the subject norm about the behavior, the attitude toward the behavior and the perceived behavioral control So this research model is established by analyzing these three factors affecting to the decision to use BIDV credit card

The concept of the variables in the proposed research model:

 Subject Norm (SN) about the credit card using behavior

The decision to use credit card of customers can be influenced from the decision, attitude and attention from groups who have significant implications as parents, spouses, friends,

Subject Norm (SN) about

the credit card using behavior

Attitude toward the behavior (ATB) in credit

card using

Perceived Behavioral Control (PBC) in credit

card using

Decision to use the BIDV

credit card

also affect to the decision of customers The effects of these factors have different levels

of intensity depending on the level of significance, their importance to customers Variable

Subject Norm about the credit card using behavior is abbreviated SN and is represented

by the comments, rating as the follows:

 SN1: The legal system is completed enough to ensure the cardholder’s interests in case

of disputed

 SN2: People who are important with you support you in using of credit cards

 SN3: The technological infrastructure of Vietnam is good enough to operate the credit

card payment systems

 SN4: Once the credit card is lost, the cardholder won’t be damaged about the asset

 SN5: The POS of BIDV are common and widespread

 SN6: Your friends and colleagues support you in using of credit cards

 Attitude toward the behavior (ATB) in credit card using

Attitude toward the behavior includes the positive or negative assessments of a specific individual when that individual implements a specific behavior by himself With the customers use BIDV credit cards, these are their reviews about the BIDV credit card products after using, it can be feelings, evaluation about the satisfaction or dissatisfaction, positive or negative which depends on the satisfying level of the customers’ needs The

BIDV credit card product can meet their demand or be the negative impact on their

financial capacity Variable Attitude toward the behavior in credit card using is abbreviated ATB and is represented by the comments, rating as the follows:

 ATB1: The procedures for credit card granting at BIDV are quick and science

 ATB2: When using the credit card, you have to incur more fees and interest rates

 ATB3: The conditions for credit card granting at BIDV are easy to respond

 ATB4: BIDV has implemented well in introduction about the credit card products

 ATB5: The credit card can help you to go shopping online and by phone

 ATB6: BIDV brand has a great impact on the decision to your choice when using the

credit card