Research On Development Of China's Bankcard Industry

Since the issuance of the first bank card in China in 1986, the bank card business has been developing rapidly. At present, China has become one of the most potential markets for bank card business in the world with the fastest growing speed.In early 2004, China Unionpay (CUP) announced the strategy of brand internationalization for CUP cards and opened handling markets in Hong Kong and Macao, a milestone of the first expansion of the cards out of mainland China which represents their development towards internationalization. At the same time, foreign organizations that run the same business accelerated their steps for entering into the Chinese market. With an increasingly apparent influence of the international bank card industry on the Chinese market, a frame in which penetrations and integrations between different markets as well as co-operations and competitions between organizations coexist is being formed.It is thus becoming more and more important for domestic bank card issuance organizations to learn about the developing trends of the international bank card industry and master the modes of management, marketing and risk control for the cards. From the perspective of the development of the industry, new applications have been injecting vigor into the expansion of the cards. With the popularization of Internet, booming electronic commerce, expanding Internet Shopping & Payment as well as the integration of Internet and mobile communications, mobile payment, a new business mode, has been given to birth. The mobile payment, along with all above-mentioned, have provided broad market opportunities for the development of bank card business.Compared with those in developed foreign countries, bank card business in China still has a long way to go. It is also facing fierce competitions from foreign funded financial organizations. In this paper, it is considered that the bank card industry in China should be transformed from the current mode of card issuance managed by professional unit in different commercial banks into a unified card brand through inter-bank co-operations and actively prepare for expansion in overseas markets for new profit rising points. It is also suggested that the government should actively foster and improve the macro-environment for the bank card market and support the incubation of specialized bank card service companies to realize a professional and scaled industry; gradually improve relevant laws of the industry to set up a reasonable and advanced product structure; strengthen propaganda through Medias to promote people's understanding of the cards.In the context of a macro-environment for bank card industry created by the government, card issuing organizations should speed up innovations for their operation systems to enhance the core competitiveness of their products. It is thus suggested that they are to build operation systems in conformability with the development regulation of bank cards; expedite the improvement of the structure of products, especially increasing the rate of credit card; introduce a risk assessment system to strengthen the ability of risk management; enhance the marketing management and product innovations to establish their unique advantages for competition.