China UnionPay overtops Visa by cards number
China UnionPay becomes the world’s largest card network by number of cards. With more plastic cards in circulation than any other payment network, 2.9 billion cards, or 45% of the world’s total last year, UnionPay is now accepted in 135 countries, according to Bloomberg. The fast-growing overseas spending of Chinese consumers backs China UnionPay’s global expansion. Chinese spent a record US$ 7.7 billion (EUR 5.8 billion) on shopping in the US last year, according to US Commerce Department data. Their purchases climbed at least 30% annually in seven of the past eight years, the data show (cf. Smart Insights Weekly #12-44).
Its rise is causing friction as the firm grabs market share from Visa as well as MasterCard, which UnionPay surpassed in customer spending in the first half of the year. Its share of global credit- and debit-card transaction volume for H1/2012 rose to 23.8%, propelling it to #2 behind Visa International, according to the Nilson Report.
At the time of global economic struggles, UnionPay’s 2011 profit rose about 78% to CNY 1.07 billion (EUR 128 million), on revenue of CNY 6 billion (EUR 716 million), China Business News reported in April 2012, citing data from the company’s shareholder meeting. Over the past four years, UnionPay’s revenue has more than tripled while profit increased almost 11-fold, according to the report. According to Bloomberg, China’s UnionPay dominates in a market where credit- and debit-card receivables are forecast to rise to US$ 397 billion (EUR 297 billion) by 2015.