Chillin' out till it needs to be funded
The Citi consumer bank decided to get a little more adventurous in its 56 branch business in China with approvals for its credit cards business to operate in the mainland coming from China Banking Regulatory Commission. The local payments platform and provider Union pay manages the $2.4 tln payments business (CnY 13 tln) in China. Citi and HSBC already provide credit card support for their partners Shanghai Pudong and Bank of Communications respectively, HSBC for instance providing technical and administrative operations as per the FT
The Citi branded cards would miss the omnipresent Visa/Master logo on the front of the card as it operates in mainland China even as its numbers add to the 268 mln credit cards in issue in China in 2010, similar to the number iin issue by Master/Visa/Discover and Amex in the USA. Citi will be the first outsider to enter the China Credit cards market.
China’s retail markets and travel business do have their own peculiarities but the tried and tested Union pay system is unlikely to be threatened by such peculiarities as shopping for cheaper international brands from Hongkong than in local high duty ridden expensive price tags or that the cash loan on credit cards is a non existent product.
Union Pay is accepted across 117 countries and recent products include provision of settlement in THB outside China. Some countries in the neighbouring Asia regions also allow cardswiping transactions in Taxis an d at most ATMS in Thailand according to achievemnets count4ed by Union pay in its last press releases
China will grow at above 8% in 2012 according to IMF even as some property curbs are unlikely being lifted early risking instability in the Property markets to swap for growth as the country mulls ways of increasing domestic demand and providing affordable housing as a way out.