Bank card payment seen rising

Chinese consumers' willingness to pay by bank card is rising, with bank card transactions making up 46.3 percent of the country's retail sales in the third quarter of 2012, People's Bank of China, the country's central bank, said Monday.

Chinese banks had issued 3.4 billion bank cards by the end of the third quarter, up 21.2 percent year-on-year, the central bank said on its website.

Over 800 million people in China will have at least one bank card by the end of 2012, Shu Shizhong, assistant president of China UnionPay, the country's largest bank card services provider, said Monday in Hefei, Anhui Province.

Some 318 million credit cards had been issued by the end of the third quarter, up 18.8 percent year-on-year, the central back data showed. But the growth rate was 1.5 percentage points lower than that registered during the same period last year.

"Unlike the aggressive expansion to grab market share in recent years, commercial banks implemented stricter rules for credit card issuance this year due to increasing default risks and the overall tight credit environment," Zhang Guoqiang, an analyst at industry website bankrate.com.cn, told the Global Times Monday.

Data from the central bank showed that credit card loans that were more than six months overdue reached a total of 14.43 billion yuan ($2.32 billion) by the end of September, up 8.8 percent quarter-on-quarter, and accounting for 1.4 percent of total credit loans outstanding.

Meanwhile, Chinese consumers have become more accustomed to paying by bank card. The average bank card transaction value per capita reached 4,152 yuan in the third quarter, up from 3,619 yuan in the second quarter.

Bank card transactions accounted for 46.3 percent of China's retail sales in the third quarter of 2012, up 6.1 percentage points from a year earlier, according to the central bank.

"But the proportion is still lower than that in developed countries, where it amounts to up to 70 percent," Zhang said.

Industry experts hope that lowering bank card transaction fees will promote the use of bank cards.

Starting from February 25, 2013 China's businesses will pay 23 to 40 percent less in transaction fees when their customers pay by bank card, Shanghai Securities News, a daily newspaper affiliated to the Xinhua News Agency, reported Wednesday, citing sources from commercial banks.

Restaurant owners have complained in the past about their profit margins being squeezed by high bank card transaction fees. Currently, China UnionPay charges companies in the catering sector a fee of 2 percent of the transaction value.

"I found many restaurants, even some posh ones in Beijing's Sanlitun area, declined to accept payment by bank card," He Jie, a 29-year-old white-collar worker in Beijing, told the Global Times Monday.