China UnionPay overtakes Visa

MANILA, Philippines - China UnionPay has overtaken Visa as the world’s largest payments card scheme, according to Retail Banking Research (RBR).

There were eight billion payments card in circulation in 2010, of which 29.2 percent carry the UnionPay brand, compared to 28.6 percent for Visa. However, Visa is still well ahead in terms of usage and spending.

MasterCard accounts for 20 percent, American Express just 1.1 percent, JCB 0.8 percent and Discover 0.7 percent. Private label cards make up 10 percent of the total with the same proportion coming from domestic banks.

Globally, the pre-paid and debit card sectors each grew by more than 10 percent in 2010, while the credit card sector contracted by six percent.

Debit cards now account for 62 percent of all cards, credit for 28 percent, charge six percent and pre-paid three percent.

RBI predicts steady growth in the market, with 10.1 billion cards in circulation by 2015 as a slowdown in issuance in the mature North American and Western European regions is more than offset by rapid growth elsewhere.

The trend away from credit to debit will continue over the next few years, while pre-paid cards will see significant growth, accounting for five percent of all plastic by 2015.

Established in 2002, China UnionPay has grown at an extraordinary rate, strongly helped by rules that mean foreign companies are not allowed to issue their own cards denominated in its currency, build networks, or process interbank point-of-sale transactions, instead having to co-brand.

This has led to tension with Visa, which is eager to gain access to the massive Chinese market, prompting the American firm to approach the US government about filing a WTO trade complaint.