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China's central bank and other related government agencies have formulated guidelines and measures to accelerate the development of the burgeoning bank card industry.
The People's Bank of China (PBC) said Monday it and another eight government agencies have jointly issued a circular that aims to strengthen the competitiveness of the local bank card industry and minimize risk, largely by stepping up pertinent legislation, enhancing government support and upgrading technology.
The PBOC said consensus has been reached on the importance of accelerating the development of the bank card industry, which it said can help reduce transaction costs, boost consumption, increase tax revenues and aid anti-money-laundering efforts.
Analysts say China's robust economic growth is providing a favourable environment for an acceleration of the industry, while the anticipated foreign rivalry at the end of 2006, when foreign banks will be allowed into the renminbi bank card business as part of China's World Trade Organization commitments, also makes faster development of the industry an urgent task.
Among the measures proposed, the circular urges speedier drafting of bank card regulations to provide legal protection for participants in the bank card industry.
It also aims to promote the use of corporate cards, encouraging local governments and affiliated entities to use bank cards to pay their travel and administrative expenses.
The circular requires related government agencies to come up with preferential policies including tax breaks to support the use of bank cards.
The PBOC also revealed plans to expand the payment system to facilitate acceptance of cards, aiming to connect 60 per cent of merchants that have more than 1 million yuan (US$120,000) in annual sales by the end of 2008.
It also aims to bring the share of bank card payments in total retail sales to 30 per cent by 2008, compare to only 5 per cent last year.
Since Bank of China issued the country's first bank card in 1985, the bank card industry has witnessed increasingly rapid growth, making China one of the most promising markets for bank card business.
Card issuance totalled 762 million at the end of last year, more than 100 million up from a year earlier, PBOC statistics showed.
(China Daily May 10, 2005)
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