China’s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, Strategies, Products and Competitive Landscape

During the review period (2008–2012), the Chinese card payments channel registered a CAGR of 18.42%, representing 3.9 billion cards in circulation in 2012. The channel is expected to post a forecast-period (2013–2017) CAGR of 8.06% to reach 6.1 billion cards in circulation by 2017. Changing lifestyle demographics, the popularity of online shopping and higher disposable incomes per capita supported the growth of the volume of cards in circulation. The Chinese card payments channel grew substantially both in volume and value terms during the review period. In terms of number of cards in circulation, the channel grew at a robust pace from 2.0 billion cards in 2008 to 3.9 billion cards in 2012, at a CAGR of 18.42%. Debit card category remained the largest category accounted for 82.3% of the category market share in 2012 and recorded a CAGR of 17.89% during the review period. Over the forecast period, total card volume is expected to grow at a CAGR of 8.06% to reach 6.1 billion cards by the end of 2017. In terms of transactions value, the Chinese card payments channel grew CNY9.6 trillion (US$1.4 trillion) in 2008 to CNY36.9 trillion (US$5.8 trillion) in 2012, at a CAGR of 40.15%. It is expected to grow at a CAGR of 13.96% over the forecast period from CNY46.0 trillion (US$7.3 trillion) in 2013 to CNY77.5 trillion (US$12.2 trillion) in 2017.

Scope

• This report provides a comprehensive analysis of China’s cards and payments industry.

• It provides the current values for China’s cards and payments industry for 2012, and forecast figures for 2017.

• It details the different economic, infrastructural, consumer and business drivers affecting China’s cards and payments industry.

• It outlines the current regulatory framework in the industry.

• It details the marketing strategies used by various banks and other institutions.

• It profiles the major banks in China’s cards and payments industry.

Key Highlights

• The Chinese card payments channel grew substantially both in volume and value terms during the review period. In terms of number of cards in circulation, the channel grew at a robust pace from 2.0 billion cards in 2008 to 3.9 billion cards in 2012, at a CAGR of 18.42%. Debit cards remained the largest category, accounting for 82.3% of the channel in 2012 and recording a CAGR of 17.89% during the review period. Over the forecast period, total card volume is expected to grow at a CAGR of 8.06% to reach 6.1 billion cards by the end of 2017.

• Changing lifestyle demographics, the popularity of online shopping and higher disposable incomes per capita supported the growth of the volume of cards in circulation.

• China has an established online-commerce infrastructure. Domestic sites such as Taobao, tuan800 and 360 buy have outperformed international competitors such as ebay and Amazon. High internet penetration rates and the availability of online payment infrastructure have encouraged consumers to spend online.

• The Chinese credit card category is expected to attract more foreign competitors over the forecast period. Foreign banks were not permitted to issue their own credit cards until 2012, and could only circulate co-branded cards in collaboration with a Chinese counterpart. However, Citibank has been granted the first stand-alone license to deal credit cards in the Chinese market. Foreign banks will have to apply to, and be approved by, the regulatory authorities if they wish to do the same.

Reasons to buy

• Make strategic business decisions using top-level historic and forecast market data related to China’s cards and payments industry and each market within it.

• Understand the key market trends and growth opportunities within China’s cards and payments industry.

• Assess the competitive dynamics in China’s cards and payments industry.

• Gain insights into the marketing strategies used for selling various card types in China.

• Gain insights into key regulations governing China’s cards and payment industry.

Companies mentioned

Shanghai Rural Commercial Bank

Bank of China

Industrial and Commercial Bank of China

Agricultural Bank of China

Citibank

MasterCard

Visa

Table of Contents

1 Executive Summary

2 Analysis of Industry Environment, Key Trends and Drivers

2.1 Payment Infrastructure and Emerging Technologies

2.1.1 ATMs

2.1.2 POS terminals

2.1.3 Enhanced security measures on card products

2.1.4 Internet penetration

2.1.5 Network related drivers

2.2 Business Drivers

2.2.1 Growth of remittances

2.2.2 Retail sector dynamics

2.2.3 Growth of gift cards and closed-loop cards

2.2.4 Online commerce growth

2.2.5 Growth of luxury expenditure

2.3 Economic Drivers

2.3.1 GDP

2.3.2 GDP per capita

2.3.3 Low unemployment rate

3 Cards and Payments Industry Share Analysis

3.1 Overview of the Cards and Payments Industry

3.1.1 Cash

3.1.2 Checks

3.1.3 Card payments

3.1.4 Credit transfer

4 Regulatory Framework and Card Fraud Statistics

4.1 Regulatory Framework

4.1.1 CUP’s payment guidelines

4.1.2 Anti-money laundering regulations legislation

4.1.3 Foreign direct investment (FDI) regulations

4.2 Card Fraud Statistics

4.2.1 Card-not-present fraud

4.2.2 Counterfeit cards

4.2.3 Cards lost or stolen

4.2.4 Card ID theft

5 Emerging Consumer Attitudes and Trends

5.1 Industry Segmentation and Targeting

5.1.1 Retail segment

5.1.2 Corporate segment

5.2 Travel and Tourism Spending

5.2.1 Outbound tourist volume

5.2.2 Outbound tourist spending

5.3 Retail Card Spending

5.3.1 Analysis by product categories

5.3.2 Analysis by retail channels

6 Analysis of Card Payments Channel and Growth Prospects

6.1 Channel Share Analysis by Card Category

6.2 Size and Forecast of the Card Payments Channel

6.2.1 Analysis by number of cards in circulation

6.2.2 Analysis by transaction value

7 Analysis of Credit Card Payments and Growth Prospects

7.1 Overall Category Size and Forecast

7.1.1 Analysis by volume of cards in circulation

7.1.2 Analysis by transaction value

7.1.3 Analysis by transaction volume

7.2 Transaction Share Analysis by Channel

7.2.1 Analysis by transaction value

7.2.2 Analysis by transaction volume

7.3 Personal Credit Cards Size and Forecast

7.3.1 Analysis by volume of cards in circulation

7.3.2 Analysis by transaction value

7.3.3 Analysis by transaction volume

7.4 Commercial Credit Cards Sub-Category Size and Forecast

7.4.1 Analysis by number of cards in circulation

7.4.2 Analysis by transaction value

7.4.3 Analysis by transaction volume

7.5 Competitive Landscape

7.5.1 Scheme share analysis

7.5.2 Issuer share analysis

8 Analysis of Debit Card Payments and Growth Prospects

8.1 Overall Category Size and Forecast

8.1.1 Analysis by number of cards in circulation

8.1.2 Analysis by transaction value

8.1.3 Analysis by transaction volume

8.2 Transaction Share Analysis by Channel

8.2.1 Analysis by transaction value

8.2.2 Analysis by transaction volume

8.3 Competitive Landscape

8.3.1 Scheme share analysis

8.3.2 Issuer share analysis

9 Analysis of Charge Card Payments and Growth Prospects

9.1 Overall Category Size and Forecast

9.1.1 Analysis by number of cards in circulation

9.1.2 Analysis by transaction value

9.1.3 Analysis by transaction volume

9.2 Transaction Share Analysis by Channel

9.2.1 Analysis by transaction value

9.2.2 Analysis by transaction volume

9.3 Personal Charge Cards Segment Size and Forecast

9.3.1 Analysis by number of cards in circulation

9.3.2 Analysis by transaction value

9.3.3 Analysis by transaction volume

9.4 Commercial Charge Cards Sub-Category Size and Forecast

9.4.1 Analysis by volume of cards in circulation

9.4.2 Analysis by transaction value

9.4.3 Analysis by transaction volume

9.5 Competitive Landscape

9.5.1 Scheme share analysis

10 Analysis of Prepaid Card Payments and Growth Prospects

10.1 Overall Category Size and Forecast

10.1.1 Analysis by number of cards in circulation

10.1.2 Analysis by transaction value

10.2 Open-Loop Prepaid Cards Segment Size and Forecast

10.2.1 Analysis by number of cards in circulation

10.2.2 Analysis by transaction value

10.3 Closed-Loop Prepaid Cards Segment Size and Forecast

10.3.1 Analysis by number of cards in circulation

10.3.2 Analysis by transaction value

11 Merchant Acquiring

11.1 Merchant Acquirers

12 Company Profiles of Card Issuers

12.1 Shanghai Rural Commercial Bank (SRCB)

12.1.1 Key financials

12.1.2 Card portfolio

12.1.3 Strategies

12.2 Bank of China (BOC)

12.2.1 Key financials

12.2.2 Card portfolio

12.2.3 Strategies

12.3 Industrial and Commercial Bank of China Limited (ICBC)

12.3.1 Key financials

12.3.2 Card portfolio

12.3.3 Strategies

12.4 Agricultural Bank of China

12.4.1 Key financials

12.4.2 Card portfolio

12.4.3 Strategies

12.5 Citibank (China) Co., Ltd

12.5.1 Key financials

12.5.2 Card portfolio

12.5.3 Strategies

13 Appendix

13.1 Methodology

13.2 Contact GlobalData

13.3 About GlobalData

13.4 GlobalData’s Services

13.5 Definitions

13.6 Disclaimer

List of Tables

Table 1: Chinese Payment Channels (CNY Trillion), 2008–2012

Table 2: Market Entry Strategies of Various Foreign Corporate and Retail Bank

Table 3: Chinese Card Fraud (CNY Million), 2008–2012

Table 4: Chinese Consumer Card Spending by Product Category (CNY Million), 2008–2012

Table 5: Chinese Consumer Card Spending by Retail Channel (CNY Million), 2008–2017

Table 6: Chinese Card Payments Channel by Card Category (Million), 2008–2017

Table 7: Chinese Card Payments Channel Size by Volume of Cards (Billion), 2008–2017

Table 8: Chinese Card Payments Channel Size by Transaction Value (CNY Trillion), 2008–2017

Table 9: Chinese Card Payments Channel Size by Transaction Value (US$ Trillion), 2008–2017

Table 10: Chinese Credit Cards Category Size by Volume of Cards (Million), 2008–2017

Table 11: Chinese Credit Cards Category Size by Transaction Value (CNY Trillion), 2008–2017

Table 12: Chinese Credit Cards Category Size by Transaction Value (US$ Billion), 2008–2017

Table 13: Chinese Credit Card Category Size by Transactions Volume (Billion), 2008–2017

Table 14: Chinese Personal Credit Cards Sub-Category Size by Volume of Cards (Million), 2008–2017

Table 15: Chinese Personal Credit Cards Sub-Category Size by Transaction Value (CNY Trillion), 2008–2017

Table 16: Chinese Personal Credit Cards Sub-Category Size by Transaction Value (US$ Billion), 2008–2017

Table 17: Chinese Personal Credit Cards Sub-Category Size by Number of Transactions (Billion), 2008–2017

Table 18: Chinese Commercial Credit Cards Sub-Category Size by Volume of Cards (Million), 2008–2017

Table 19: Chinese Commercial Credit Cards Sub-Category Size by Transaction Value (CNY Billion), 2008–2017

Table 20: Chinese Commercial Credit Cards Sub-Category Size by Transaction Value (US$ Billion), 2008–2017

Table 21: Chinese Commercial Credit Cards Sub-Category Size by Number of Transactions (Million), 2008–2017

Table 22: Chinese Debit Card Category Size by Volume of Cards (Billion), 2008–2017

Table 23: Chinese Debit Cards Category Size by Transaction Value (CNY Trillion), 2008–2017

Table 24: Chinese Debit Cards Category Size by Transaction Value (US$ Trillion), 2008–2017

Table 25: Chinese Debit Cards Category Size by Volume of Transactions (Billion), 2008–2017

Table 26: Chinese Charge Cards Category Size by Volume of Cards (Million), 2008–2017

Table 27: Chinese Charge Cards Category Size by Transaction Value (CNY Billion), 2008–2017

Table 28: Chinese Charge Cards Category Size by Transaction Value (US$ Billion), 2008–2017

Table 29: Chinese Charge Cards Category Size by Volume of Transactions (Million), 2008–2017

Table 30: Chinese Personal Charge Cards Sub-Category Size by Volume of Cards (Million), 2008–2017

Table 31: Chinese Personal Charge Cards Sub-Category Size by Transaction Value (CNY Billion), 2008–2017

Table 32: Chinese Personal Charge Cards Sub-Category Size by Transaction Value (US$ Billion), 2008–2017

Table 33: Chinese Personal Charge Cards Sub-Category Size by Transaction Volume (Million), 2008–2017

Table 34: Chinese Commercial Charge Cards Sub-Category Size by Card Volume (Million), 2008–2017

Table 35: Chinese Commercial Charge Cards Sub-Category Size by Transaction Value (CNY Billion), 2008–2017

Table 36: Chinese Commercial Charge Cards Sub-Category Size by Transaction Value (US$ Billion), 2008–2017

Table 37: Chinese Commercial Charge Cards Sub-Category Size by Transaction Volume (Million), 2008–2017

Table 38: Chinese Prepaid Cards Category Size by Volume of Cards (Million), 2008–2017

Table 39: Chinese Prepaid Cards Category Size by Transaction Value (CNY Billion), 2008–2017

Table 40: Chinese Prepaid Cards Category Size by Transaction Value (US$ Billion), 2008–2017

Table 41: Chinese Open-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2008–2017

Table 42: Chinese Open-Loop Prepaid Cards Segment Size by Transaction Value (CNY Billion), 2008–2017

Table 43: Chinese Open-Loop Prepaid Cards Segment Size by Transaction Value (US$ Billion), 2008–2017

Table 44: Chinese Closed-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2008–2017

Table 45: Chinese Closed-Loop Prepaid Cards Segment Size by Transaction Value (CNY Billion), 2008–2017

Table 46: Chinese Closed-Loop Prepaid Cards Segment Size by Transaction Value (US$ Billion), 2008–2017

Table 47: Banks Served by UMS in the Merchant Acquiring Business

Table 48: SRCB’s Key Financial Indicators (CNY Billion), December 2011 and 2012

Table 49: SRCB – Card Product Offerings and Key Features

Table 50: BOC’s Key Financial Indicators (CNY Billion), December 2011 and 2012

Table 51: BOC – Card Product Offerings and Key Features

Table 52: ICBC’s Key Financial Indicators (CNY Billion), December 2011 and 2012

Table 53: ICBC – Card Product Offerings and Key Features

Table 54: ABC’s Key Financial Indicators (CNY Billion), December 2011 and 2012

Table 55: ABC – Card Product Offerings and Key Features

Table 56: Citibank China’s Key Financial Indicators (CNY Billion), December 2011 and 2012

Table 57: Citibank China – Card Product Offerings and Key Features

Table 58: Key Definitions

List of Figures

Figure 1: Benchmarking the Chinese Card Payments Channel Against Other Large Markets in the Region

Figure 2: China – Growth of Various Card Categories (%), 2008–2017

Figure 3: Penetration of ATMs in China, 2008–2017

Figure 4: Penetration of POS Terminals in China, 2008–2017

Figure 5: Chinese Internet Penetration Rate (%), 2008–2012

Figure 6: Chinese Retail Sales Value (CNY Trillion), 2008–2017

Figure 7: Chinese GDP Growth Rate (%), 2008–2017

Figure 8: Chinese GDP Per Capita Income (US$), 2008–2017

Figure 9: Chinese Unemployment Rate (%), 2008–2017

Figure 10: Share of Chinese Payment Channels (%), 2008 and 2012

Figure 11: Chinese Card Fraud (CNY Million), 2008 and 2012

Figure 12: Chinese Value of Card-Not-Present Fraud (CNY Million), 2008–2012

Figure 13: Chinese Counterfeit Card Fraud Value (CNY Million), 2008–2012

Figure 14: Chinese Value of Card Fraud by Lost or Stolen Cards (CNY Million), 2008–2012

Figure 15: Chinese Card ID Theft Fraud Value (CNY Million), 2008–2012

Figure 16: Chinese Cards Payments Channel Segmentation by Card Type

Figure 17: Chinese Volume of Outbound Tourists (Million), 2008–2012

Figure 18: Chinese Outbound Tourist Spending (CNY Billion), 2008–2017

Figure 19: Chinese Retail Consumer Card Spending by Product Category (%), 2012

Figure 20: Chinese Retail Consumer Card Spending by Retail Channel (%), 2012

Figure 21: Chinese Card Payments Channel by Card Category (%), 2008–2017

Figure 22: Chinese Card Payments Channel Size by Volume of Cards (Billion), 2008–2017

Figure 23: Chinese Card Payments Channel Size by Transaction Value (CNY Trillion), 2008–2017

Figure 24: Chinese Credit Cards Volume and Penetration, 2008–2017

Figure 25: Chinese Credit Cards Category Size by Volume of Cards (Million), 2008–2017

Figure 26: Chinese Credit Cards Category Size by Transaction Value (CNY Trillion), 2008–2017

Figure 27: Chinese Credit Card Category Size by Transactions Volume (Billion), 2008–2017

Figure 28: Chinese Credit Card Transactions Value by Channel (CNY Billion), 2008–2017

Figure 29: Chinese Credit Card Transactions Volume by Channel (Million), 2008–2017

Figure 30: Chinese Personal Credit Cards Sub-Category Size by Volume of Cards (Million), 2008–2017

Figure 31: Chinese Personal Credit Cards Sub-Category Size by Transaction Value (CNY Trillion), 2008–2017

Figure 32: Chinese Personal Credit Cards Segment Size by Number of Transactions (Billion), 2008–2017

Figure 33: Chinese Commercial Credit Cards Sub-Category Size by Volume of Cards (Million), 2008–2017

Figure 34: Chinese Commercial Credit Cards Sub-Category Size by Transaction Value (CNY Billion), 2008–2017

Figure 35: Chinese Commercial Credit Cards Sub-Category Size by Number of Transactions (Million), 2008–2017

Figure 36: Chinese Credit Cards Category by Volume of Cards (Million), 2011 and 2012

Figure 37: Chinese Credit Cards Category Share by Bank (%), 2012

Figure 38: Chinese Debit Cards Category Volume and Penetration, 2008–2017

Figure 39: Chinese Debit Card Category Size by Volume of Cards (Billion), 2008–2017

Figure 40: Chinese Debit Cards Category Size by Transaction Value (CNY Trillion), 2008–2017

Figure 41: Chinese Debit Cards Category Size by Volume of Transactions (Billion), 2008–2017

Figure 42: Chinese Debit Cards Category Transactions Value Share Analysis by Channel (CNY Trillion), 2008–2017

Figure 43: Chinese Debit Card Transactions Volume Share Analysis by Channel (Million), 2008–2017

Figure 44: Chinese Debit Cards Category by Volume of Cards (Billion), 2011 and 2012

Figure 45: Chinese Debit Cards Category Share by Bank (%), 2012

Figure 46: Chinese Charge Cards Category Volume and Penetration, 2008–2017

Figure 47: Chinese Charge Cards Category Size by Volume of Cards (Million), 2008–2017

Figure 48: Chinese Charge Cards Category Size by Transaction Value (CNY Billion), 2008–2017

Figure 49: Chinese Charge Cards Category Size by Volume of Transactions (Million), 2008–2017

Figure 50: Chinese Charge Card Transactions Value Share Analysis by Channel (CNY Billion), 2008–2017

Figure 51: Chinese Charge Card Transactions Volume Share Analysis by Channel (Million), 2008–2017

Figure 52: Chinese Personal Charge Cards Sub-Category Size by Volume of Cards (Million), 2008–2017

Figure 53: Chinese Personal Charge Cards Sub-Category Size by Transaction Value (CNY Billion), 2008–2017

Figure 54: Chinese Personal Charge Cards Sub-Category Size by Transaction Volume (Million), 2008–2017

Figure 55: Chinese Commercial Charge Cards Sub-Category Size by Card Volume (Million), 2008–2017

Figure 56: Chinese Commercial Charge Cards Sub-Category Size by Transaction Value (CNY Billion), 2008–2017

Figure 57: Chinese Commercial Charge Cards Sub-Category Size by Transaction Volume (Million), 2008–2017

Figure 58: Chinese Charge Cards Category Share by Volume of Cards (Million), 2011 and 2012

Figure 59: Chinese Prepaid Cards Category Volume and Penetration, 2008–2017

Figure 60: Chinese Prepaid Cards Category Size by Volume of Cards (Million), 2008–2017

Figure 61: Chinese Prepaid Cards Category Size by Transaction Value (CNY Billion), 2008–2017

Figure 62: Chinese Open-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2008–2017

Figure 63: Chinese Open-Loop Prepaid Cards Segment Size by Transaction Value (CNY Billion), 2008–2017

Figure 64: Chinese Closed-Loop Prepaid Cards Segment Size by Volume of Cards (Million), 2008–2017

Figure 65: Chinese Closed-Loop Prepaid Cards Segment Size by Transaction Value (CNY Billion), 2008–2017

Figure 66: Annual Growth of ICBC’s Various Businesses (%), 2011–2012

Figure 67: ABC’s Volume of Card Products (Million), 2011 and 2012

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