Bejing opens up $8trn Chinese credit card clearing market up to competition

Beijing this week officially ended UnionPay’s  longstanding monopoly and opened up the  CNY 55 trn ($8.4bn)  Chinese credit card clearing market to domestic and foreign players. The move has been four years in the making since a 2012 WTO ruling judged that it was  discriminatory of China to bar foreign electronic payment processors from handling yuan-denominated transactions. There are 5.4 billion cards in circulation in China, and some 48%  of all the country’s gross consumption and retail activities  were conducted by card last year, according to the People’s Bank of China that issued a joint statement with the China Banking Regulatory Commission explaining that the move was intended  to encourage competition and open up the market.
“The principle… is to create a level playing field and attract more institutions to participate in market competition,” a spokesman said. “In future, China’s bank card clearing market will be pluralistic. Multiple brands would compete and offer different and differentiated services. This will allow the card market to sustainably renew itself and optimise its structures and developments. 
“The development of the new mechanism will benefit consumers and cardholders and give them more personalised bank card services; all the while creating a more secure and efficient payment ecosystem to meet the public’s payment demands. This will in the end help raise consumption and living standard in the country.”