Locals have more 'sleeping' cards
28/4/2004 16:54
A total of 42.15 million bank cards were issued in Shanghai by the end
of last year, but between half and three-fourths of the cards are 'sleeping'
cards, serving small deposits that are seldom used, the Shanghai Morning Post
reported today.
Every local resident currently has an average of four bank
cards.
Local banks should focus on the quality rather than the number of
cards issued, said an industry analyst.
"The number of cards issued cannot
represent the development of the whole banking industry, nor is it the main
criteria to evaluate bank-card business, said the spokesman with the Bank of
China's Shanghai branch.
Among bank cards, only one or two million are credit
cards, far too few for Shanghai, the spokesman pointed out, adding that debit
cards have accounted for the main proportion of local bank cards.
The costs
for maintaining debit cards are higher than the profits gained from these cards,
he said.
"When a client applies for a bank card, we focus on how many times
he will use the card and bring us earnings," the spokesman said, adding that
many clients have applied for several cards but never used them.
As of the
second half of last year, the Agricultural Bank of China decided to charge debit
card holders 10 yuan (US$1.2) in annual fees, to reduce the number of sleeping
cards.
In developed countries like the US, profits from the bank-card
business account for 30-50 percent of the annual earnings of commercial banks,
especially credit card business.
At present, domestic bank earnings on
bank-card business are mainly from service charges (annual fees and
commissions), deposits, consumption via POS machines and fund services.
After
reducing the number of sleeping cards, bank-card quality in Shanghai should
improve, said an expert with MasterCard International, adding that Shanghai
citizens shouldn't be afraid of being charged for their bank cards, as the
charging will guarantee them better services.
Wendy Zhang/ Shanghai Daily news
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