The Cards and Payments Industry in China: Emerging Trends and Opportunities to 2019

China was Asia’s largest payment cards market in 2014, in terms of card transaction value and volumes. Cash is still a popular instrument among consumers, however, especially in rural areas. This was primarily due to a lack of knowledge of payment cards, or little or no access to banking infrastructure. As the government and banks began to provide basic financial access to the unbanked population, by expanding banking infrastructure, launching new branches and making efforts to change consumer payment habits, payment cards gradually became more accepted, with their use consequently growing during the review period (2010 to 2014).

According to the World Bank, the percentage of the Chinese population aged 15 or above with a bank account has been steadily increasing. To speed up the provision of financial and banking services to the unbanked population, the CBRC granted a license to the two private banks, WeBank and MYBank, in 2014. These initiatives, along with changing lifestyles, a rise in the economically active population and per capita disposable income, the growing popularity of online shopping, the increased acceptance of cards at retail outlets and the adoption of contactless technology supported the growth of payment cards over the review period. This trend is anticipated to continue over the forecast period.

Cash continues to dominate the Chinese cards and payments industry in terms of transaction volume. One of the primary reasons for cash dominance is a consumer preference to keep a track of their day-to-day spending. In terms of transaction value, however, cash is gradually decreasing as consumers are using payment cards at POS terminals, especially for low-value transactions.

Payment cards are gaining popularity among Chinese consumers. Banks offer debit and credit cards, with credit cards having a maximum interest-free credit period of up to 56 days. Banks offer a range of debit cards targeting different consumer segments, accompanied with a range of value-added services. In contrast, banks offer an installment facility to credit cardholders with flexible repayment options. Consequently, the industry share of payment cards in terms of transaction value and volumes increased during the review period – a trend which is anticipated to continue over the forecast period.

The use of payment cards in China steadily increased during the review period, primarily supported by the growing number of POS terminals, growth in the number of retailers accepting payment cards and a growing consumer preference for card payments. Debit cards remained the most preferred payment card in terms of both transaction value and volume.

Scope

• Detailed insights into payment instruments including check payments, credit transfers, checks, payment cards and cash transactions.

• An overview of China’s key alternative payment instruments.

• Analysis of various market drivers and regulations governing China's cards and payments industry.

• A detailed analysis of strategies adopted by banks and other institutions to market debit, credit and charge cards in the Chinese market.

• The competitive landscape of China's cards and payments industry.

• An analysis of the different demographic, economic, infrastructural and business drivers affecting China's cards and payments industry.

• An outline of the current regulatory framework in the Chinese cards and payments industry.

• Insight on marketing strategies used by various banks and other institutions.

• Profiles of major banks in China's cards and payments industry.

Key Highlights

What significant initiative has China implemented following a World Trade Organization (WTO) ruling? What problem has this ruling sought to address? What has occurred as a direct result of the initiative? What is this move by the Chinese government anticipated to achieve in the payment cards market?

Why has the Chinese government proposed a new set of regulations? What stipulations do the regulations make in regard to online payments? What negative impact is anticipated if these regulations are implemented?

What are operators doing to capture a larger share of the growing Chinese payment cards market? Which business partnership has launched a mobile wallet in 14 Chinese cities? Who are the partner banks in this initiative?

Reasons to buy

• Apply GlobalData’s top-level historic and forecast market data to inform your activities in each sector of China's cards and payments industry.

• Investigate the key market trends and growth opportunities and identify those which best suit your expansion strategy.

• Assess the competitive dynamics of China's cards and payments industry to position your operations in order to gain maximum competitive advantage.

• Analyze the marketing strategies adopted for selling various card types in China and emulate those which provide the best opportunity to develop your product propositions.

• Identify the key regulations governing China's cards and payments industry and address any compliance issues that might potentially hinder your participation in the market.

Companies mentioned

Agricultural Bank of China

China Construction Bank

Industrial and Commercial Bank of China

Bank of China

Bank of Communications

China UnionPay

Visa

MasterCard

American Express

Table of Contents

1 Definitions and Methodology

1.1 Definitions

1.2 Methodology

2 Key Facts and Events

3 Executive Summary

4 Payment Instruments

4.1 Current Payment Environment

4.2 Alternative Payment Instruments

4.2.1 Alipay

4.2.2 Smile To Pay

4.2.3 Tenpay

4.2.4 PayPal

5 Regulations in the Cards and Payments Industry

5.1 Regulatory Framework

5.1.1 CUP’s payment guidelines

5.1.2 Proposed regulations for e-commerce

5.2 Anti-Money Laundering (AML)

5.3 Foreign Direct Investment (FDI) Regulations

6 Analysis of Cards and Payments Industry Drivers

6.1 Demographic Drivers

6.2 Economic Drivers

6.3 Infrastructure Drivers

6.4 Business Drivers

7 Market Segmentation and New Product Launches

7.1 Market Segmentation and Targeting

7.1.1 Consumer cards

7.1.2 Commercial cards

7.2 New Product Launches

8 Payment Cards

8.1 Payment Card Analysis

8.1.1 Volume and value of payment card transactions by type

8.1.2 Personal vs commercial cards

9 Debit Cards

9.1 Debit Card Market Analysis

9.1.1 Debit card transaction volumes and values by channel

9.1.2 Debit card scheme and issuer shares in terms of transaction value

9.1.3 Debit cards comparison

10 Credit Cards

10.1 Credit Card Market Analysis

10.1.1 Credit card transaction volumes and values by channel

10.1.2 Credit card scheme and issuer shares in terms of transaction value

10.1.3 Credit cards comparison

11 Charge Cards

11.1 Charge Card Market Analysis

11.1.1 Charge card transaction volumes and values by channel

11.1.2 Charge card scheme shares in terms of transaction value

11.1.3 Charge cards comparison

12 Commercial Cards

12.1 Commercial Card Market Analysis

12.1.1 Commercial cards comparison

13 Card Issuers

13.1 Agricultural Bank of China

13.2 China Construction Bank

13.3 Industrial and Commercial Bank of China

13.4 Bank of China

13.5 Bank of Communications

14 Prepaid Cards

14.1 Prepaid Card Market Analysis

14.1.1 Prepaid cards comparison

15 Appendix

15.1 Tables

15.2 Contact GlobalData

15.3 About GlobalData

15.4 GlobalData’s Services

15.5 Disclaimer

List of Tables

Table 1: Key Definitions

Table 2: Annual Average Exchange Rate

Table 3: China – Key Facts, 2014

Table 4: Regional Benchmarking of Chinese Payment Cards, 2014

Table 5: China – Mode of Entry of Foreign Banks

Table 6: Cards for High-Income Consumers, 2015

Table 7: Cards for Travelers, 2015

Table 8: Cards for Shoppers, 2015

Table 9: Cards for Students and Young Population, 2015

Table 10: Commercial Cards Comparison and Key Features, 2015

Table 11: China – New Product Launches

Table 12: China – Debit Cards Comparison and Key Features, 2015

Table 13: China – Gold Credit Cards Comparison and Key Features, 2015

Table 14: China – Premium Credit Cards Comparison and Key Features, 2015

Table 15: China – Charge Cards Comparison and Key Features, 2015

Table 16: China – Commercial Cards Comparison and Key Features, 2015

Table 17: China – Prepaid Cards Comparison and Key Features, 2015

Table 18: China – Payment Instrument Transaction Values (CNY Trillion), 2010–2014

Table 19: China – Payment Instrument Transaction Values (US$ Trillion), 2010–2014

Table 20: China – Payment Instrument Transaction Volumes (Million), 2010–2014

Table 21: China – Number of Payment Cards in Circulation by Type (Million), 2010–2019

Table 22: China – Volume of Payment Card Transactions by Type (Million), 2010–2019

Table 23: China – Value of Payment Card Transactions by Type (CNY Trillion), 2010–2019

Table 24: China – Value of Payment Card Transactions by Type (US$ Billion), 2010–2019

Table 25: China – Personal and Commercial Card Transaction Volumes (Million), 2010–2019

Table 26: China – Personal and Commercial Card Transaction Values (CNY Billion), 2010–2019

Table 27: China – Personal and Commercial Card Transaction Values (US$ Billion), 2010–2019

Table 28: China – Number of Debit Cards in Circulation (Million), 2010–2019

Table 29: China – Debit Card Transaction Volumes and Frequency by Channel, 2010–2019

Table 30: China – Debit Card Total and Average Transaction Values by Channel, 2010–2019

Table 31: China – Debit Cards Total and Average Transaction Value by Channel, 2010–2019

Table 32: China – Number of Debit Cards in Circulation By Scheme (Million), 2010–2014

Table 33: China – Debit Card Transaction Values By Scheme (CNY Billion), 2010–2014

Table 34: China – Debit Card Transaction Values By Scheme (US$ Billion), 2010–2014

Table 35: China – Debit Card Transaction Values by Issuer (CNY Billion), 2010–2014

Table 36: China – Debit Card Transaction Values by Issuer (US$ Billion), 2010–2014

Table 37: China – Number of Credit Cards in Circulation (Million), 2010–2019

Table 38: China – Credit Card Transaction Volumes and Frequency by Channel, 2010–2019

Table 39: China – Credit Card Total and Average Transaction Values by Channel, 2010–2019

Table 40: China – Credit Card Total and Average Transaction Values by Channel, 2010–2019

Table 41: China – Number of Credit Cards in Circulation By Scheme (Million), 2010–2014

Table 42: China – Credit Card Transaction Values By Scheme (CNY Billion), 2010–2014

Table 43: China – Credit Card Transaction Values By Scheme (US$ Billion), 2010–2014

Table 44: China – Pay Later Card Transaction Values By Issuer (CNY Billion), 2010–2014

Table 45: China – Pay Later Card Transaction Values By Issuer (US$ Billion), 2010–2014

Table 46: China – Credit Card Balances Outstanding By Issuer (CNY Billion), 2010–2014

Table 47: China – Credit Card Balances Outstanding By Issuer (US$ Billion), 2010–2014

Table 48: China – Number of Charge Cards in Circulation (Million), 2009–2018

Table 49: China – Charge Card Transaction Volumes and Frequency by Channel, 2009–2018

Table 50: China – Charge Card Total and Average Transaction Values by Channel, 2009–2018

Table 51: China – Charge Card Total and Average Transaction Values by Channel, 2009–2018

Table 52: China – Number of Charge Cards in Circulation By Scheme (Million), 2010–2014

Table 53: China – Charge Card Transaction Values By Scheme (CNY Billion), 2010–2014

Table 54: China – Charge Card Transaction Values By Scheme (US$ Billion), 2009–2014

Table 55: China – Number of Commercial Cards in Circulation (Million), 2010–2019

Table 56: China – Commercial Card Transaction Values (CNY Billion), 2010–2019

Table 57: China – Commercial Card Transaction Values (US$ Billion), 2010–2019

Table 58: China – Number of Prepaid Cards in Circulation (Million), 2010–2019

Table 59: China – Prepaid Card Transaction Values (CNY Billion), 2010–2019

Table 60: China – Prepaid Card Transaction Values (US$ Billion), 2010–2019

List of Figures

Figure 1: China – Payment Instrument Shares by Transaction Value (%), 2010 and 2014

Figure 2: China – Payment Instrument Shares by Transaction Volume (%), 2010 and 2014

Figure 3: China – E-Commerce Value of Transactions by Payment Type

Figure 4: China – Total Population and Structure, 2014

Figure 5: China – Economic Indicators, 2010–2019

Figure 6: China – Number of ATMs, POS Terminals and Banking Structure, 2010–2019

Figure 7: China – Retail Sales and E-Commerce Values, 2010–2014

Figure 8: China – Cards and Payments Industry Segmentation by Card Type, 2015

Figure 9: China – Growth in Payment Card Transaction Values and Number of Cards in Circulation by Type, 2010–2019

Figure 10: China – Volume and Value of Payment Card Transactions by Type (%), 2010–2019

Figure 11: China – Personal and Commercial Card, Transaction Volumes and Values (%), 2010–2019

Figure 12: China – Growth in Debit Card Transaction Values and Number of Debit Cards in Circulation, 2010–2019

Figure 13: China – Debit Card Transaction Volumes and Values by Channel, 2010–2019

Figure 14: China – Debit Card Scheme and Issuer Shares in Terms of Transaction Value (%), 2014

Figure 15: China – Growth in Credit Card Transaction Values and Number of Credit Cards in Circulation, 2010–2019

Figure 16: China – Credit Card Transaction Volumes and Values by Channel, 2010–2019

Figure 17: China – Credit Card Scheme and Issuer Shares in Terms of Transaction Value (%), 2014

Figure 18: China – Growth in Charge Card Transaction Values and Number of Charge Cards in Circulation, 2010–2019

Figure 19: China – Charge Card Transaction Volumes and Values by Channel, 2010–2019

Figure 20: China – Charge Card Scheme Shares in Terms of Transaction Value (%), 2014

Figure 21: China – Number of Commercial Cards in Circulation and Transaction Values, 2010–2019

Figure 22: China – Number of Prepaid Cards in Circulation and Transaction Values, 2010–2019

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