IMS Research has launched a new report predicting that the number of payment and banking smart cards shipped in China will leap from 17 million in 2010 to more than one billion total by 2016.
According to Analyst Don Tait, The People’s Bank of China’s announcement in March to convert the country’s debit and credit payment cards to smart cards is the key to driving growth. By mandate, all financial institutions in China must be ready to issue financial smart cards by January 1, 2013. As a result, by 2015 all new cards issued in China will be smart cards – most likely dual interface. This mandate will also have a global effect on smart card shipments running up to 2016, according to Tait.
“In China there is a much higher proportion of the population with bank accounts in cities than in rural areas,” said Tait. “IMS Research forecasts that this urban market will grow quickly. The attitude, particularly of the young, is that it is very easy to open a new account when required. In some aspects, accounts are almost seen as commodity or disposable items. Having many bank accounts could be considered particular to China. It is also worth noting that some of these bank accounts are dormant.
“The growth of payment and banking cards in China is projected to happen over a much shorter time frame than in many developed Western countries,” concluded Tait. “This reflects the fact that change is mandated. Having the support of the government will also drive this initiative to mass roll out and acceptance.”