The nation's largest electronic payment network China UnionPay said yesterday it will foray into second- and third-tier cities this year.

 

"We are targeting bank card use, as a percentage of total retail sales, of more than 10 percent in second-tier cities by the end of this year," said Yan Qiang, assistant president of China UnionPay.

 

Last year, the company expanded from the coastal to inland areas by setting up branches in Jilin, Inner Mongolia, Shanxi, Tibet, Heilongjiang and Guangxi.

 

That increased bank card availability to 1.18 million points of sale at 740,000 endorsed outlets and 120,000 automatic teller machines by the end of 2007 - increases of 363,000, 218,000 and 25,000 respectively on a yearly basis.

 

Last year there were 3.98 billion domestic bank card transactions valued at more than 3.2 trillion yuan, up 40.9 percent and 78.4 percent year-on-year.

 

"We're going to open branches in northwestern Xinjiang Uygur and Ningxia Hui autonomous regions as well as Gansu and Qinghai provinces this year," China UnionPay President Xu Luode said earlier.

 

Increasing bank card use is reshaping Chinese shopping habits, although cash remains the main form of payment, a recent Nielsen survey said.

 

The report, based on 11,500 Chinese consumers in 18 cities - including Shanghai, Beijing, Guangzhou, Chengdu, Shenzhen and Shenyang - said urban cardholders were gradually adopting Western consumer habits of using cards not only for shopping, but also for cash withdrawals and payments.

 

A bank card service tailored to migrant workers has also sprung up quickly in the past year and is now available at 36,000 rural credit cooperatives across 14 provinces.

 

(China Daily January 30, 2008)