Competition to stimulate credit card market
10/1/2003 16:28
Fierce competition between domestic banks and their foreign
counterparts is expected to spark a burst of development in the Chinese credit
card market, eastday.com reported today.
The Industrial and Commercial
Bank of China (ICBC) issued both yuan and Hong Kong dollar credit cards early
this year, and the China Construction Bank (CCB) launched its "dragon card" and
opened a credit card center in Shanghai.
The Citibank Group purchased a
five-percent share of the Shanghai Pudong Development Bank and jointly
established a credit card center with its new partner. The Hong Kong and
Shanghai Banking Corporation (HSBC) announced a credit card issue for the first
half of the year.
To date, 400 million bank cards have been issued in
China, most of them debit cards. In Shanghai 33.34 million bank cards--only
87,000 of them credit cards--were issued by the end of September last year, with
each Shanghainese holding an average of two cards. In contrast, every person in
the United States now holds an average of six credit cards.
The domestic
bank card market has great potential, said an industry analyst.
Credit
card business has become a major profit source, accounting for one-third of net
profits at Citibank, the analyst noted.
Credit card holders generally
have higher social status and can spur development in related industries, which
is an important reason why banks want to increase the number of credit card
holders, the analyst said.
Domestic banks have begun to cooperate with
international credit card institutions such as Visa International and MasterCard
to keep up with international standards and tap the overseas market. "ICBC, Bank
of China, CCB, Bank of Communications and Guangzhou Development Bank are already
cooperating with us, and up to six more domestic commercial banks will join
hands with us in the coming year," said a Visa International spokesperson.
Nearly all the foreign banks are seeking authorization to operate
international bank card business in China, with some expected to receive
approval from the People's Bank of China for the first quarter of the
year.
A new round of competition is around the corner, said the analyst.
But foreign banks won't have much influence in the short term on the credit card
business of domestic banks, which has yet to be fully opened, according to a
domestic bank.
Wendy Zhang/ Shanghai Daily news
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