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Despite rapid digitisation of payments in China, credit card usage will reach new heights by 2020
Chinese credit card industry exploded over the past two years, with growth rates being recorded in the number of credit cards issued and outstanding credit card debt, as well as the income from credit card business.

February 28, 2019 | Wendy Weng

Despite the rapid digitisation of payments in China, credit card usage has expanded again since 2015, We expect growth for credit cards in issue between 2015 to 2020 to come in at a compounded annual growth rate (CAGR) of 22% compared to 14% during the period 2010 to 2015. Credit utilisation rate has also increased steadily, as credit card outstanding balances has grown faster than the credit limits.

The number of credit cards per capita was up from 0.15 in 2010 to 0.47 at the end of September 2018 (Figure 1). China’s credit card market is far from saturated, and thus there is still plenty of room to grow.

China’s credit card market still has further potential to grow

Fig 1. Number of credit cards per capita in China compared to India, Thailand and Malaysia

In conclusion, we expect strong growth in credit card business for the major Chinese banks. Banks increasingly focus on micro segments and theme cards where critical scale can be achieved but also partner with fintech companies and large non bank payment providers to stay competitive. An increasing number of credit card customers are interacting with their banks through digital channels and more innovations in regards to functionalities and customer experience are expected.  Meanwhile, banks are continuing their efforts to improve credit card customer acquisition and management and also strength risk management.

Total number of credit cards in issue was up by 27% in 2017, the highest growth rate since the global financial crisis. We expect credit cards in issue rose 31% yoy in 2018 (Figure 2). The digital micro payments have enjoyed rapid expansion, while total number of credit cards in issue stagnated since 2010 and saw a dip in 2015, which can be partially attributed to the increased risk control amid economic slowdown and the impact of rapid de...

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Keywords: Mobile Payment, Consumer Credit