Payment card market in China experiences growth in 2010 - research

According to the Payment Card Market in China 2010 report, issued by research company Mercator Advisory Group, at the end of June 2010, there were 2.27 billion payments cards in China, including 207 million credit cards and 2.06 billion debit cards. In the first half of 2010, approximately USD 672 billion (CNY4.52 trillion) purchase payments were made using these cards, up 62 percent from the same period a year earlier, far faster than all major developed card markets and most developing markets.

However, despite the impressive growth, Chinas payment card market is still facing major challenges, the same report poins out. One of them isthe fact that Chinas economy might reverse its impressive growth and slow down significantly as the governments economic stimulus package comes to an end. Moreover, card penetration in urban areas especially large cities are quickly approaching saturation, making future rapid growth much more difficult in less ready markets. In addition, credit card business remains at loss for the majority of the banks including four of the top five credit card issuers.

There were 2.06 billion credit and debit cards in China by the end of 2009, almost twice the size of the US market. About CNY6.8 trillion (USD1 trillion) purchases were made using these cards during that period, roughly a third of the US card spending. Recently, MasterCard predicted that China is expected to overtake the US, as the largest market for credit cards by 2020, with about 900 million cards in circulation.