September 14, 2010
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News: China Steadily Takes Lead In CC Debt
Currently, the U.S. has the largest debit and credit card market in the world, however, recent information says that is about to change. According to MasterCard Inc., China is expected to grow its credit card market to over 900 million cards by the year 2020 which will surpass the total number of cards in circulation in the U.S. MasterCard also expects that China card transactions will increase by 11 percent in quantity and 14 percent in the transaction dollar value consistently until 2025. MasterCard, one of the world's two largest credit card networks made the announcement in a statement in Shanghai. According to the statement, card issuers will realize an increase in revenue 20 fold and a 30 fold increase in profits.
If one of the major credit card companies hadn't yet targeted China to offset decreasing profits in the U.S., the news is certain to send them back to the drawing table. Some the world's top card companies have already begun marketing their products in the country including American Express, Citigroup Inc. and HSBC Holdings Plc. China has been the world's fastest growing economy in the world with a 14.5 percent increase in card circulation over the past year. These companies are counting on earnings from the booming Chinese credit card market to boost earnings lost through U.S. legislation and high card defaults.
Debit and credit card payment networks including Visa and MasterCard have stepped up their marketing strategies in China which has led to intensified competition is expected to continue as the market grows. Chen Bin, Vice President of MasterCard's China unit said that the country will have over 1.1 billion card in circulation by 2025 up from the 230 million card currently in circulation., Chen also added that there is little question that the payment transaction rate for China will greatly surpass that of the U.S. to an estimated $2.5 trillion by 2025.