China is the world’s largest payment card market in terms of transaction value followed by the US, the UK ($1.1tn), Germany, and France. Cash, however, remains a popular payment instrument among Chinese consumers, especially in rural areas, accounting for 63% of the total payment transaction volume in 2017. One of the primary reasons for the dominance of cash is a consumer preference to keep track of their day-to-day spending.
Government and banks have begun to provide basic financial access to the unbanked population by expanding banking infrastructure, launching new branches, and making efforts to change consumer payment habits. As a result, payment cards are gradually becoming more accepted, with their use consequently growing during the review period (2013-17e).
China is the largest e-commerce market in the world. In terms of transaction value, it grew at a CAGR of 31%. Domestic payment solutions Alipay and Tenpay collectively account for nearly half of the total e-commerce transaction value. International payment solutions are also strengthening their presence.
High penetration of smartphones and the long history of contactless payments have created a unique opportunity for mobile proximity payments in China. Chinese consumers are accustomed to using mobile phones for payments. In an environment in which e-commerce giants and smartphone manufacturers have all launched NFC mobile payment solutions, mobile phone-based contactless payments are likely to prevail.
The report 'Payments Landscape in China: Opportunities and Risks to 2021', provide top-level market analysis, information and insights into the Chinese cards and payments industry.
Specifically, this report allows the following -
- Current and forecast values for each market in the Chinese cards and payments industry, including debit, credit, and charge cards.
- Detailed insights into payment instruments including credit transfers, cheques, cash, and payment cards. It also, includes an overview of the country's key alternative payment instruments.
- E-commerce market analysis and payment methods.
- Analysis of various market drivers and regulations governing the Chinese cards and payments industry.
- Detailed analysis of strategies adopted by banks and other institutions to market debit, credit, and charge cards.
- In August 2017 China’s central bank the People's Bank of China created a nationwide centralized online payment clearing platform, involving both banks and third-party online payment companies. To set up this platform the central bank signed an agreement with 44 companies, including Alibaba Group Holdings’ affiliate Ant Financial, Tencent Holdings, and China UnionPay’s affiliate. The central bank has mandated banks and online payment systems such as Alipay and Tenpay to connect to the new platform and route transactions through it as of June 30, 2018. This move will allow the Chinese government to effectively monitor online transactions carried out through both banks and third-party online payment providers, thereby curbing money laundering and other illicit transactions.
- The Chinese credit card market is expected to attract more foreign competitors, as in June 2016 the central bank formally opened its credit card clearing market to foreign companies. The rules issued by the central bank and the China Banking Regulatory Commission require foreign companies to comply with national security and cybersecurity standards, and be locally based. The move, which ends CUP’s monopoly, was a result of longstanding demand for international scheme providers - particularly Mastercard and Visa.
- In a bid to boost competition in the credit card market, the central bank relaxed credit card lending rates in April 2016. Effective from January 2017, the new rule allows banks to offer up to a 30% discount on the credit card lending rate. In order to give banks autonomy to set their own terms, the central bank has also decided to eliminate unified rules on banks' interest-free periods and minimum monthly repayments. Prior to the regulation, the lending rate was fixed at 0.05% per day; the interest-free period ran up to 60 days, while the minimum monthly payment was at least 10% of monthly bills. The new rule also allows banks to decide whether and how much to charge card holders for delays in payments.
- Make strategic business decisions, using top-level historic and forecast market data, related to the Chinese cards and payments industry and each market within it.
- Understand the key market trends and growth opportunities in the Chinese cards and payments industry.
- Assess the competitive dynamics in the Chinese cards and payments industry.
- Gain insights into marketing strategies used for various card types in China.
- Gain insights into key regulations governing the Chinese cards and payments industry.
Payments Infrastructure & Regulation
- China Construction Bank
- Agricultural Bank of China
- Industrial & Commercial Bank of China
- Bank of China
- Postal Savings Bank of China
- China Merchants Bank
- Bank of Communications
- People’s Bank of China
- China UnionPay