The current situation of my credit card payment
Please read the speech of Chen Jing, Director of the Central Bank in April 2003
Director of the Science and Technology Department of the Central Bank: The development of credit cards needs to be transformed "Five Mountains"
Although VISA and MasterCard, two major international credit card organizations, have stated through surveys that China is the largest potential market for credit cards, yesterday (17th) Chen Jing, Director of the Science and Technology Department of the People's Bank of China, said , the development of China's credit card market still needs to solve five major problems. The difference in the consumption concepts of cardholders is an important difference between China's credit card market and foreign credit card market. Chen Jing said at the "China Financial Credit and Credit Card High-Level Seminar" yesterday: "It is impossible to live without a credit card in the United States, but the Chinese do not have such a problem, because the Chinese people's consumption habits are to live within their means and are unwilling to overdraft with banks. " Secondly, the lack of a unified national personal credit reporting system has affected the development of the credit card market. "Although banks subjectively support the development of credit cards, because the private credit system has not yet been connected to the Internet except in Shanghai, banks cannot fully share cardholders' credit records, and banks cannot distinguish between high-quality customers and ordinary customers. and customers who defaulted on their bank loans.” Furthermore, the credit card management systems in China and abroad are also different. In developed countries, credit cards are the main growth point of card business profits and an important means to compete for important customers. However, in our country, financial institutions regard debit cards as a means of absorbing deposits, pursue the scale of card issuance one-sidedly, and ignore efficiency. Therefore, Chen Jing believes that it is necessary to absorb foreign experience and adopt a centralized management model. In addition, Chen Jing also specifically mentioned the "Bank Card Management Regulations" that have not yet been released. He said: “Without professional regulations and supporting systems for business operations, there are no rules of the game in the market. Whichever party’s interests are harmed, including the issuing banks, acquiring banks, intermediaries, special merchants and cardholders, will affect the development of China’s credit card market. Development." The reporter learned that the "Bank Card Management Regulations" were submitted to the Legislative Affairs Office of the State Council as early as 2001, but due to various reasons it has not been released yet. Chen Jing believes that the domestic card usage environment needs to be further improved. Judging from the current situation, there is still a big gap between the current situation and the needs for hosting the 2008 Olympic Games and the 2010 World Expo. He introduced that there are currently 297,000 retail merchants in Beijing, and there are only 6,000 special merchants. However, he said that this year, the UnionPay logo will be universal in all prefecture-level cities, and the error rate in bank card use will be further reduced and the ability to handle errors will be improved to make returns and exchanges more convenient.
Look at the news from the Securities Times:
The foreign credit card market has gone through several stages of budding, growth and maturity, and comprehensive market wars are mainly launched in the mature stage. Although the domestic credit card market has just sprouted, in order to seize the commanding heights of credit card business development since joining the WTO and create competitive advantages, a comprehensive credit card market war has begun. This is also the biggest difference between the domestic credit card market and foreign countries. (It’s hard to buy a cow with money, I don’t need to hesitate anymore)
As of March 2003, banks that have issued credit cards include China Guangdong Development Bank, Bank of China, ICBC, China Merchants Bank, Bank of Shanghai, China Construction Bank, Shenzhen Development Bank, and China CITIC Bank . There are about 1.3 million credit cards issued nationwide, of which more than half were added in 2002. Banks such as Agricultural Bank of China and Bank of Communications plan to issue cards within this year, and Shanghai Pudong Development Bank is preparing to issue joint credit cards with Citibank.
Comprehensive credit card market
The war has begun
Product war. In order to seize specific customer groups, various banks are rushing to launch new products. In order to seize the increasingly large outbound queues, Bank of China and China Construction Bank issue international cards, while ICBC, China Merchants Bank and Bank of Shanghai issue cards combining domestic and foreign currencies. (Analyze the true purpose of mainstream funds and discover the best profit opportunities!)
Regional war. Change the previous strategy of issuance of debit cards and quasi-credit cards that flourished but failed to bear fruit, and select target markets to focus on card issuance. For example, ICBC and Bank of China focus on people entering and exiting Hong Kong and Shenzhen; China Construction Bank only issues international cards in Shanghai; China Merchants Bank adopts the strategy of issuing regular cards in Beijing, Shanghai, Shenzhen and Hangzhou, and only gold cards in other branch locations.
Price war.
In order to seize market share, Guangdong Development Bank took the lead in launching the slogan of waiving the annual fee for the first year when applying for RMB cards, US dollar cards, and Hong Kong dollar cards.
Propaganda war. China Guangdong Development Bank and China Merchants Bank paid close attention to placing advertisements intensively in places where eyeballs are concentrated, posting posters in residential areas, office building elevators, and subways, and placing light box advertisements and newspaper advertisements. One bank has invested more than 100 million yuan in advertising for its self-issued cards in more than three months.
References and Enlightenments
Does China already have the economic strength to issue credit cards? Is it appropriate to issue cards without a credit center? Similar issues have always attracted everyone's attention. In fact, there is a sufficient basis for domestic banks to issue cards one after another, and foreign banks rushing to enter the domestic credit card market.
1. The economic foundation and customer resources for large-scale issuance of credit cards have been formed.
The domestic urban population with a per capita GDP exceeding US$3,000 has exceeded 66.45 million. According to international practice, when per capita GDP exceeds US$3,000, there will be a large demand for credit cards. As of 2001, domestic cities with per capita GDP exceeding US$3,000 include Beijing, Shanghai, Guangzhou, Shenzhen, Xiamen, Dongguan, Zhongshan, Suzhou, Hangzhou, and Wuxi, with a population of 66.45 million, indicating that the country has the capacity to carry out large-scale credit card business economic base and population size. Judging from international experience, in a market situation where the per capita GDP exceeds US$3,000, the customer base with increasingly strong demand for the credit card market has been formed, and peers have increased their efforts in operating credit card brands, and foreign banks are approaching the city, if they do not give full play to their latecomer advantages, If cards are issued as soon as possible, not only will existing mature customers apply for cards from other banks in large numbers, but the bank's existing customers will also lose a large number of customers and become "inertial" customers of other banks. This also means that the bank will pay higher marketing costs to develop in the future. market.
2. The government’s strong support for the development of the credit card industry plays a huge role
The country accelerates the progress of the joint network project. In order to improve the card usage environment, the country specially established China UnionPay and achieved positive results. First, a network for withdrawals and consumption in different places and across banks has been formed. At present, there are 46,000 networked ATM machines and 223,000 networked POS machines in 100 cities across the country, making it easier for cardholders to withdraw money and spend money in different places and across banks. Second, there are more channels for repaying overdrafts. UnionPay is promoting ATM inter-bank transfer and Internet inter-bank transfer services in Beijing, Shanghai, Shenzhen, Guangzhou, Hangzhou and other places, which will make it easier for cardholders to repay overdrafts through transfers from other banks’ card accounts.
Local governments should promptly formulate preferential policies and measures. Among them, Beijing and Shanghai are the most prominent. As the Beijing Municipal Government is preparing for the 2008 Olympic Games and Shanghai is preparing for the 2010 World Expo, the two cities have respectively introduced policies and measures to support the development of the bank card industry. First, Beijing established the “Beijing Bank Card Application Development Conference Office”. On January 3, 2003, a 1,600-person "Bank Card Industry Development Mobilization Conference" was held, led by the mayor and attended by ministries, districts and counties, and commercial banks in Beijing. Since January 2003, a 24-month “swipe your card and win prizes” campaign has been launched throughout the city. It is planned to increase the proportion of card consumption in total retail sales of consumer goods from the existing 5.6 to 20. Second, Shanghai established the “Shanghai Bank Card Industry Leading Group”. Since October 2002, the "Bank Card Consumption Prize-winning Activity" has been held for 36 consecutive months. It is planned to establish a bank card industry chain with relatively complete categories and a relatively high degree of marketization within three years, and become a domestic bank card industry center with a gathering of domestic card issuers and professional service agencies, a complete service system, and continuous innovation in bank card business and technology
Looking at a piece of news in April 2008
China’s credit cards have entered a period of rapid development
my country’s credit cards have entered a period of rapid development. According to statistics, by the end of last year, the number of credit cards issued in my country reached 90.26 million, an increase of 82% from the same period last year. Industrial and Commercial Bank of China and China Merchants Bank occupy the vast majority of the credit card market with 23 million and 20.68 million cards respectively.
Judging from the published annual reports, the card issuance volume of each bank last year was almost close to or exceeding the previous total number of card issuances.
Among them, ICBC exceeded 23 million, doubling the number at the end of the previous year; China Merchants Bank issued a total of 20.68 million cards, with 10.34 million new cards issued that year; Bank of Communications and HSBC cooperated to issue more than 5 million cards, with 3 million new cards issued that year. China CITIC Bank has issued a total of 4.22 million cards, with 1.9386 million new cards issued that year, an increase of 91.91%; Minsheng Bank has issued a total of 3.34 million cards, with 1.9 million new cards issued last year, a year-on-year increase of 46%; Shanghai Pudong Development Bank and Citigroup have jointly issued a total of 1.6694 million cards, with a year-on-year increase of 91.91%. There were 1.0569 million new cards issued; the number of valid cards issued by Shenzhen Development Bank was 1.8843 million, a year-on-year increase of 191. There were 1.3703 million new cards issued that year, a year-on-year increase of 419.
Nonetheless, given that the current credit card ownership rate among Chinese residents is low, the credit card market still has huge room for growth. Chen Jin, president of China CITIC Bank Credit Card Center, believes that this rapid development of my country's credit card market will continue for 3 to 5 years.
He said that CITIC Credit Card will not drive growth at the expense of profitability. During this period, banks that can manage risks well and provide better products and services to customers will win out in the competition. The heads of credit card centers of China Merchants, Minsheng, Guangfa and other banks have also stated that they pay more attention to the improvement of credit card quality, including risk control and the precise development of different target customers, than the growth of volume. At present, China Merchants Bank’s Air China Voicemail Card, CITIC and Minsheng Bank’s Platinum Cards, and Guangfa and CITIC’s Women’s Cards have become their respective iconic products.
Industry insiders pointed out that my country’s commercial banks should learn enough lessons from the US subprime mortgage crisis. Since credit cards involve far more than housing mortgage business, we cannot be careless about the potential risks and problems that may arise. When the volume of card issuance is rapidly expanding, it is necessary to take precautions and control various risks from all aspects.
One of the profit characteristics of the credit card industry is the scale effect based on the principle of large numbers. After completing their staking in the credit card market, in the next few years, major banks will shift their focus to maintaining customer loyalty and deeply exploring customer value. According to experience in mature markets, when per capita GDP reaches US$5,000, credit cards will enter an internationally recognized period of rapid growth in credit consumption. In 2006, dozens of Chinese cities had reached this size. The life cycle of credit card products has also entered a mature stage from the growth stage that began in 2002. Goldman Sachs predicts that China’s credit card loans will reach US$7 billion to US$9 billion in the next 4 to 6 years. The Visa Credit Card Organization also concluded that China's middle-income population may exceed 200 million in 2010.
From the growth stage of China's credit cards to the maturity stage, the 10 years from 2003 to 2012 will be destined to become a "critical era" in the Chinese banking industry. This is not only because it will ultimately determine how much share each bank can get in the credit card pie, but also because it can be regarded as the first collective "ability test" after the marketization of China's banking industry.