The "Chinese Century" Applies To Payments Too
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9 September 2009
Much has been written about China's ascendancy on the world economic stage, and many economists feel that it is just a matter of time before China outgrows the U.S. in terms of GDP. It's probably time for the payments world to realize that China's growing role applies to payments as well. Flipping through the latest issue of The Nilson Report, I came across some startling numbers regarding China Union Pay (CUP), the Chinese banking industry's payment card association. Across the Asia-Pacific Region in 2008, CUP had a purchase volume market share of 35%, just behind Visa which had a 37% share, but well ahead of MasterCard which had a 16% share. Keep in mind that CUP has only been around since 2002... It would be unwise to think that CUP will stay at #2 in the A-P region for very long. In almost every card metric (e.g., purchase volumes, number of transactions, number of cards, etc.), CUP grew twice as fast as Visa in the 2007-2008 time period. Assuming a continuation of current growth rates, CUP should overtake Visa in terms of total dollar volume by 2011. Look at MasterCard's and Visa's annual reports, and you're almost sure to find some referral to the A-P Region as an area of significant growth. Ironically, it seems that the biggest share of the growth is being gobbled up by CUP. Note: For more info about the Chinese credit card industry, please refer to Celent's report, Credit Card Systems in China: Technology and Vendor Overview.
Asia-Pacific, EMEA, LATAM, North America