US-based First Data and Shanghai Huateng Software have teamed up to take advantage of the expected growth in credit-card business after China joins the World Trade Organisation.
The two companies signed a co-operation agreement yesterday to provide credit-card payment and management services in the expectation that domestic banks will need to fend off stiff competition in this sector from foreign banks.
'I think this has all the makings of a marketplace that is ready for significant growth,' said Eula Adams, executive vice-president of First Data of Atlanta, Georgia.
After a signing ceremony he said he expected to see a 'significant shift away from cash to electronic transactions' in the mainland in coming years.
China has been trying to promote the use of electronic banking to reduce the widespread reliance on cash payments. It has encouraged banks to offer credit-card services and build up their computer systems.
It has also helped create a national bank-card network to allow cross-bank and cross-regional transactions under the so-called Golden Card project. Huateng has played a major role in building that network.