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
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
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.