China to have most credit cards in decade-MasterCard

By Samuel Shen and Jacqueline Wong

SHANGHAI, Sept 10 (BestGrowthStock) – China will likely surpass the
United States to become the world’s top credit card market by
number of cards in a decade, as rising wealth and urbanisation
enable Chinese consumers to spend more using plastic, MasterCard
Inc (MA.N: ) predicted on Friday.

The number of credit cards issued by Chinese banks may
quadruple to between 800 to 900 million by 2020 from 200 million
currently, the world’s second-biggest bank card processor said.

“Most people in China still tend to use cash, and by
persuading them to use bank cards instead, we would make the pie
much bigger,” Ling Hai, Greater China President of MasterCard,
told reporters in Shanghai.

“So we should take a long-term view, rather than just compete for existing card users.”

MasterCard and bigger rival Visa International (V.N: ) are
stepping up expansion in emerging markets, betting that rising
wealth there would boost bank card transactions and help offset
softer growth at home as U.S. consumers spend less in the
aftermath of the global financial crisis.

China’s bank card market is expected to grow 11 percent
annually by transaction volume and 13.9 percent by number of
cards from 2005 to 2025, MasterCard predicted.

Foreign bank card companies, however, are barred from
providing local-currency services in China, where state-backed
China UnionPay is the monopoly processor and operates the sole
bank card network in the country.

In recent years, China UnionPay has been aggressively
expanding overseas, a move that has strained its relationship
with foreign players such as Visa.

In June, China UnionPay said Visa had no right to restrict
the use of their co-branded cards overseas, after media reports
that Visa was blocking UnionPay channels.

“The only way to do business in China is through cooperation. MasterCard remains steadfast in our commitment to China,” Ling
said, declining to comment on rivals directly.
($1=6.77 Yuan)
(Editing by Jacqueline Wong)

China to have most credit cards in decade-MasterCard