Advanced Search
Business | Metro | Nation | World | Sports | Features | Specials | Delta Stories
First Data to launch ATM services in China
12/11/2006 9:29

First Data Corporation, an electronic payment processing company, is planning to launch its first ATMs in China in the coming months in a major expansion of its services in the country.

The US firm was the first card-processing company to be licensed by the Chinese Government to provide banks and other financial institutions with card issuing and outsourcing services.

"We will launch our ATM service within the next 6 to 12 months," said Nigel Lee, president of First Data International China and North Asia.

Currently, the company only provides a card-processing service in China. Among its Chinese clients are the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China International and China Everbright Bank.

In 2005, China's total bank card transaction volume amounted to 4.7 trillion yuan (595 billion U.S. dollars), including 960 billion yuan (122 billion dollars) of consumption transactions, according to data from the National Bankcard Work Conference.

"We will make the ATM service suit the Chinese market, just as we had to do with card processing," Lee said. "We will change the software, accounting requirements, and cooperate with China UnionPay to meet the Chinese requirements."

He said the card industry is building momentum, and China is a significant new player with the "strongest growth."

"There are emerging technologies and diversified products to fit into various lifestyles to create convenience for consumers," Lee said.

Emerging technologies include wireless, smart card-based loyalty programmes and account aggregation. New products will include mobile payments, pre-paid cards and healthcare cards.

According to statistics from commercial consultants McKinsey, 14 percent of profits in Chinese banking sector will come from the credit card business by 2013, second only to the mortgage business.

Based on global trends, although economic growth is the underlying driver for the expanding payments industry, the "electronification" of paper transactions presents the most immediate growth opportunities. By 2010, card-based transactions are expected to account for more than 47 percent of payment methods, compared with 25.6 percent in 1999.

"In China, the trend of outsourcing is emerging," said Lee.

Debit and credit cards are two of the most popular products in China, with local, international and dual currency card types.

"For the next few years, China's personal bank card market will continue to see rapid development," Lee said. As one of the top five global banks, Citigroup's cards formed 42 percent of the retail bank's total revenue and 21 percent of the bank's total revenue in 2005. In contrast, HSBC's figures show that cards make up 14 percent of the bank's consumer business, according to statistics from Towergroup, a consulting company.

China Daily