China will likely surpass the United States to become the world's top credit card market by number of cards in a decade, as rising wealth and urbanisation enable Chinese consumers to spend more using plastic, MasterCard Inc predicted on Friday.
The number of credit cards issued by Chinese banks may quadruple to between 800 to 900 million by 2020 from 200 million currently, the world's second-biggest bank card processor said.
"Most people in China still tend to use cash, and by persuading them to use bank cards instead, we would make the pie much bigger," Ling Hai, Greater China President of MasterCard, told reporters in Shanghai.
"So we should take a long-term view, rather than just compete for existing card users."
MasterCard and bigger rival Visa International are stepping up expansion in emerging markets, betting that rising wealth there would boost bank card transactions and help offset softer growth at home as U.S. consumers spend less in the aftermath of the global financial crisis.
China's bank card market is expected to grow 11 percent annually by transaction volume and 13.9 percent by number of cards from 2005 to 2025, MasterCard predicted.
Foreign bank card companies, however, are barred from providing local-currency services in China, where state-backed China UnionPay is the monopoly processor and operates the sole bank card network in the country.
In recent years, China UnionPay has been aggressively expanding overseas, a move that has strained its relationship with foreign players such as Visa.
In June, China UnionPay said Visa had no right to restrict the use of their co-branded cards overseas, after media reports that Visa was blocking UnionPay channels.
"The only way to do business in China is through cooperation. MasterCard remains steadfast in our commitment to China," Ling said, declining to comment on rivals directly.
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