Consumer Finance in China
Euromonitor International's Consumer Finance in China report establishes the size and structure of the market for ATMs, credit cards, debit cards, store cards and smart cards. It looks at key players in the market (issuers and operators), number of cards in circulation, numbers transactions and value of transactions. It offers strategic analysis of sector forecasts and trends to watch.
Buy online to access strategic market analysis and an interactive statistical database of value and volume for retail and internet transactions, number of cards in circulation and company brand shares.
Tables: 108 | Publication date: Mar 2009
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Consumer lending; Financial cards and payments
Executive summary
Card issuing continues to surge
Banks realise that the financial cards market will only start to realise profits for operators when there is a sufficiently large pool of cardholders. In order to achieve scale, banks are focusing on increasing the number of cards in circulation as the primary task, thus the number of cards is expected to increase rapidly over the forecast period. Promoting cards in the more prosperous areas of China and even going door-to-door have become key means of expanding the market, which is leading to the fight for customers becoming more intense.
Inactive cards undermine profitability
Customers often apply for new cards merely for the attractive gifts offered, and do not actually use the new cards frequently. When banks sell their financial cards, they tend to focus on the gifts offered to promote uptake to attract clients, rather than explaining in detail the advantages of bank cards compared with cash. This has resulted in a low rate of usage of financial cards, with a low frequency of transactions. Inactive cards still carry the cost of operating the cards for issuer, as there is rarely a service fee for the cardholder. Lack of card usage is also due to Chinese consumers’ typically rather conservative spending habits. This is likely to change, albeit only gradually, which will create a better environment for the financial cards market. The banks themselves will need to focus on trying to change consumers’ spending habits.
Banking regulators warns of risk of credit card loans
With credit card issuance by banks expanding rapidly, China’s banking regulators have sought to draw consumers’ attention to the risk of credit card loans. It has proposed the establishment of a common customer credit document pool to share information regarding creditworthiness. According to press reports, the Shanghai banking regulator has advised commercial banks to pay attention to the risk of defaulting, and has suggested that commercial banks improve their credit card management systems. For example, when banks issue credit, they need to take into account the fact that cardholders may get credit from multiple sources if different banks issue them with credit cards. Customers may thus over-stretch themselves and be unable to repay their debts, resulting in banks facing the risk of defaults on loans.
Regional commercial banks enter financial cards market
Some regional commercial banks have merged, and in looking to extend their businesses, are optimistic about the profitability of bank card products, and are actively entering the financial cards market. For example, Bank of Ningbo, after a reorganisation of local banking institutions, has targeted local private businessmen through issuing high-end platinum credit cards.
Government encourages issuing of special bank cards for migrant workers
With rapid urbanisation in China, there will be more migrant workers across the country. By the end of 2007, China had over 100 million migrant workers, many of whom have problems sending a proportion of their salary home because the rural remittance system is not well-established. As a result, they often need to carry cash home themselves, typically at spring festival. In order to provide a convenient means for migrant workers to send payments, the government has encouraged banks to issue special banks cards for migrant workers, which are also considered to be an effective way for banks to develop rural finance. This trend will continue in the forecast period, as the number of migrants moving to the major cities continues to rise.
Table of contents
CONSUMER FINANCE IN CHINA : MARKET INSIGHT
EXECUTIVE SUMMARY
Card issuing continues to surge
Inactive cards undermine profitability
Banking regulators warns of risk of credit card loans
Regional commercial banks enter financial cards market
Government encourages issuing of special bank cards for migrant workers
KEY TRENDS AND DEVELOPMENTS
Commercial cards on the quick increase with supportive policy
EMV moves from testing to implementation
Banks competing fiercely for profit in financial cards
Credit card loan risk increasing
2008 Olympic Games lead to increase in card acceptance
Financial cards raising the level of personal financial services
MARKET DATA
Table 1 Consumer Payments: Value 2003-2008
Table 2 Financial Cards: Number of Cards in Circulation 2003-2008
Table 3 Financial Cards Transactions: Value 2003-2008
Table 4 Financial Cards: Number of Transactions 2003-2008
Table 5 Financial Cards: Number of Accounts 2003-2008
Table 6 Financial Cards: Number of Cards by Issuer 2003-2007
Table 7 Financial Cards: Number of Cards by Operator 2003-2007
Table 8 Financial Cards: Card Payment Transaction Value by Operator 2003-2007
Table 9 Financial Cards: Card Payment Transactions by Acquirer 2003-2007
Table 10 Consumer Payments Forecast: Value 2008-2013
Table 11 Financial Cards Forecast: Number of Cards in Circulation 2008-2013
Table 12 Financial Cards Forecast: Value 2008-2013
Table 13 Financial Cards Forecast: Number of Transactions 2008-2013
Table 14 Financial Cards Forecast: Number of Accounts 2008-2013
MARKET INDICATORS
Table 15 Number of POS Terminals 2004-2008
Table 16 Number of ATMs 2004-2008
Table 17 Disposable Income 2003-2008
Table 18 Value Lost to Fraud 2003-2008
Table 19 Card Expenditure by Location 2008
Table 20 Card Expenditure by Sector 2008
Table 21 Financial Cards in Circulation by Type: % Number of Cards 2004-2008
Table 22 Domestic versus Foreign Spend 2008
DEFINITIONS
Summary 1 Research Sources
CONSUMER LENDING IN CHINA
EXECUTIVE SUMMARY
Consumer lending expands consistently
The range of services diversifies with mortgages/housing taking the lead
More consumer lending opportunities required in rural areas
Changing consumer habits create space for consumer lending
Lenders develop consumer credit controls
KEY TRENDS AND DEVELOPMENTS
The risk of mortgages/housing loans increases
Specialist companies enter auto lending
Small- and medium-sized banks develop consumer lending products
Foreign banks develop non-mortgage consumer credit products
Consumer lending requires secondary market to raise capital funds
Table 23 Consumer Lending By Sector: Outstanding Balance: Value 2003-2008
Table 24 Consumer Lending By Sector: Outstanding Balance: % Value Growth 2003-2008
Table 25 Consumer Lending By Sector: Gross Lending: Value 2003-2008
Table 26 Consumer Lending By Sector: Gross Lending: % Value Growth 2003-2008
Table 27 Consumer Lending: Non-performing vs Other Loans 2003-2008
Table 28 Mortgages/Housing: Non-performing vs Other Loans 2003-2008
Table 29 Consumer Credit: Non-performing vs Other Loans 2003-2008
Table 30 Forecast Consumer Lending By Sector: Outstanding Balance: Value 2008-2013
Table 31 Forecast Consumer Lending By Sector: Outstanding Balance: % Value Growth 2008-2013
Table 32 Forecast Consumer Lending By Sector: Gross Lending: Value 2008-2013
Table 33 Forecast Consumer Lending By Sector: Gross Lending: % Value Growth 2008-2013
DEFINITIONS
Sources
Summary 2 Research Sources
LOCAL COMPANY PROFILES - CHINA
BANK OF CHINA - FINANCIAL CARDS AND PAYMENTS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 3 Bank of China: Key Facts
Summary 4 Bank of China: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
Summary 5 Bank of China: Competitive Position 2007
BANK OF NINGBO CO LTD - FINANCIAL CARDS AND PAYMENTS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 6 Bank of Ningbo Co Ltd: Key Facts
Summary 7 Bank of Ningbo Co Ltd: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
CHINA MERCHANTS BANK - FINANCIAL CARDS AND PAYMENTS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 8 China Merchants Bank: Key Facts
Summary 9 China Merchants Bank: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
Summary 10 China Merchants Bank: Competitive Position 2007
INDUSTRIAL & COMMERCIAL BANK OF CHINA - FINANCIAL CARDS AND PAYMENTS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 11 Industrial & Commercial Bank of China: Key Facts
Summary 12 Industrial & Commercial Bank of China: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
Summary 13 Industrial & Commercial Bank of China: Competitive Position 2007
WATCHDATA TECHNOLOGIES LTD - FINANCIAL CARDS AND PAYMENTS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 14 Watchdata Technologies Ltd: Key Facts
COMPANY BACKGROUND
COMPETITIVE POSITIONING
ATM TRANSACTIONS IN CHINA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 34 ATM Cards Sector Performance: 2003-2008
Table 35 ATM Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 36 ATM Cards Sector Performance: % Growth 2003-2008
Table 37 ATM Cards in Circulation Sector Performance: % Growth 2003-2008
Table 38 ATM Cards Forecast Sector Performance: 2008-2013
Table 39 ATM Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 40 ATM Cards Forecast Sector Performance: % Growth 2008-2013
Table 41 ATM Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
DEBIT TRANSACTIONS IN CHINA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 42 Debit Cards Sector Performance: 2003-2008
Table 43 Debit Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 44 Debit Cards Sector Performance: % Growth 2003-2008
Table 45 Debit Cards in Circulation Sector Performance: % Growth 2003-2008
Table 46 Debit Cards: Number of Cards by Issuer 2003-2007
Table 47 Debit Cards: Number of Cards by Operator 2003-2007
Table 48 Debit Cards Transactions by Acquirer 2003-2007
Table 49 Debit Cards Payment Transaction Value by Operator 2003-2007
Table 50 Debit Cards Forecast Sector Performance: 2008-2013
Table 51 Debit Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 52 Debit Cards Forecast Sector Performance: % Growth 2008-2013
Table 53 Debit Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
CREDIT CARD TRANSACTIONS IN CHINA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 54 Credit Cards Sector Performance: 2003-2008
Table 55 Credit Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 56 Credit Cards Sector Performance: % Growth 2003-2008
Table 57 Credit Cards in Circulation Sector Performance: % Growth 2003-2008
Table 58 Personal Credit Cards Sector Performance: 2003-2008
Table 59 Personal Credit Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 60 Personal Credit Cards Sector Performance: % Growth 2003-2008
Table 61 Personal Credit Cards in Circulation Sector Performance: % Growth 2003-2008
Table 62 Commercial Credit Cards Sector Performance: 2003-2008
Table 63 Commercial Credit Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 64 Commercial Credit Cards Sector Performance: % Growth 2003-2008
Table 65 Commercial Credit Cards in Circulation Sector Performance: % Growth 2003-2008
Table 66 Credit Cards: Number of Cards by Issuer 2003-2007
Table 67 Credit Cards: Number of Cards by Operator 2003-2007
Table 68 Credit Cards Transactions by Acquirer 2003-2007
Table 69 Credit Cards Payment Transaction Value by Operator 2003-2007
Table 70 Personal Credit Cards Payment Transaction Value by Operator 2003-2007
Table 71 Commercial Credit Cards Payment Transaction Value by Operator 2003-2007
Table 72 Credit Cards Forecast Sector Performance: 2008-2013
Table 73 Credit Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 74 Credit Cards Forecast Sector Performance: % Growth 2008-2013
Table 75 Credit Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
Table 76 Personal Credit Cards Forecast Sector Performance: 2008-2013
Table 77 Personal Credit Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 78 Personal Credit Cards Forecast Sector Performance: % Growth 2008-2013
Table 79 Personal Credit Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
Table 80 Commercial Credit Cards Forecast Sector Performance: 2008-2013
Table 81 Commercial Credit Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 82 Commercial Credit Cards Forecast Sector Performance: % Growth 2008-2013
Table 83 Commercial Credit Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
CHARGE CARD TRANSACTIONS IN CHINA
HEADLINES
TRENDS
PROSPECTS
GENERAL PURPOSE PRE-PAID CARD TRANSACTIONS IN CHINA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 84 General Purpose Pre-paid Cards Sector Performance: 2003-2008
Table 85 General Purpose Pre-paid Cards Sector Performance: Number of Cards in Circulation 2003-2008
Table 86 General Purpose Pre-paid Cards Sector Performance: % Growth 2003-2008
Table 87 General Purpose Pre-paid Cards in Circulation Sector Performance: % Growth 2003-2008
Table 88 General Purpose Pre-paid Cards by Type: % Number of Cards 2004-2008
Table 89 General Purpose Pre-paid Cards: Number of Cards by Operator 2003-2007
Table 90 General Purpose Pre-paid Cards Transaction Value by Operator 2003-2007
Table 91 General Purpose Pre-paid Cards Forecast Sector Performance: 2008-2013
Table 92 General Purpose Pre-paid Cards Forecast Sector Performance: Number of Cards in Circulation 2008-2013
Table 93 General Purpose Pre-paid Cards Forecast Sector Performance: % Growth 2008-2013
Table 94 General Purpose Pre-paid Cards in Circulation Forecast Sector Performance: % Growth 2008-2013
STORE CARD TRANSACTIONS IN CHINA
HEADLINES
TRENDS
PROSPECTS