Untapped Market for Credit Cards Is Ripe for Foreign Lenders
‘ANYONE looking for signs that China is edging its way into Western consumer culture should consider this: The Bank of China, the oldest indigenous Chinese bank, now issues a Great Wall platinum Visa credit card, and it comes with a frequent-flier rewards program.
Today, only about 1 percent of Chinese citizens hold Western-style credit cards, and they tend to be the wealthiest of urban sophisticates. A majority of people use cash for all transactions; either they do not have bank accounts, or they have never been offered credit by a bank. What little personal lending occurs in China usually consists of informal arrangements among friends, family members or business associates.
But major changes are taking shape, and conditions in China have grown ripe enough to attract investments from the world’s biggest credit card issuers in the last year. Citigroup, American Express and HSBC Holdings have signed credit card partnerships with Chinese banks. Other foreign lenders, including some from Australia and Japan, are staking out exploratory positions.’
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