Firm says 900m credit cards likely
China is expected to become the world's largest credit card market by 2020, topping the US in terms of the number of cards in issue as an urbanisation drive boosts people's living standard, MasterCard said yesterday.
The mainland is likely to have about 800 million to 900 million credit cards in circulation in 2020, surpassing the US which currently has 700 million, according to Chen Bin, a vice president with MasterCard Advisors. There are now 207 million credit cards in use on the mainland.
MasterCard, the world's second-largest banking card processor, said the risks of credit card delinquencies are controllable on the mainland because of the government's tightened oversight on the business.
Beijing has intensified the crackdown on credit card defaults since last year but the amount of unpaid debts continues to rise.
A total 8.8 billion yuan (HK$10.09 billion) of credit-card debt was at least six months overdue on the mainland, the People's Bank of China said in May. That was 14.4 per cent more than the end of last year.
The overdue amount accounted for 3.5 per cent of the total outstanding credit-card debt.
The central bank has been coordinating with UnionPay, the mainland's sole domestic interbank card operator, to launch investigations into questionable credit-card transactions.
A UnionPay official said investigations had found that some retailers were colluding with cardholders to commit fraud. The increasing use of plastic benefited UnionPay, which enjoys a monopoly on the mainland.
Established international players such as Visa International and MasterCard are barred from tapping the mainland bank card market.
They could only team with the Chinese counterpart to issue dual-currency cards bearing both logos.