SEPTEMBER 2004

Global Credit Card Trends

As U.S. credit card markets have reached saturation, many issuers have shifted marketing emphasis to overseas opportunities. In this space we will bring you occasional features on credit card product developments beyond the U.S. Below are two updates.

• Credit card ownership is growing in China. According to a survey conducted by AC Nielsen Corp, 22 percent of residents in Beijing, Shanghai and Guangzhou had credit cards at the end of February 2004, up from 18 percent a year earlier. Industrial and Commercial Bank of China, the largest state-owned lender, issues the Peony card and has a 13% market share, followed by China Construction Bank's Dragon card (9% share) and Bank of China's Great Wall card (6%). Glen Murphy, the managing director of AC Nielsen China told Bloomberg News, "Spending tomorrow's money today has caught on in the three key cities, especially among the younger generation. Both domestic and foreign banks have been eyeing with great interest the credit card market in China for years, and for good reason."

• The Russian credit market is another example of a largely untapped opportunity for card issuers. There are fewer than 1.5 million general-purpose credit cards in circulation, although an additional 22 million private label credit and debit cards are also in use. European and U.S. card issuers are beginning to make inroads in the Russian market. In early August of this year, the parent company of the big French card issuer, Cetelem, announced it had acquired a 50% stake in Russian Standard Bank, which is currently the largest consumer credit lender in Russia. The French company told the American Banker that Russian consumer credit is "a high-growth potential market," having grown sixfold since 2001. Russia lacks a centralized credit bureau, making it hard for lenders, especially foreign banks, to enter the market on a large scale.