Visa Puts Its Volume In China at $5 Billion
March 30, 2011
Visa International said the dollar volume of transactions on its debit and credit cards in China totaled US$5 billion in the year ended December 11, 2010 figures on its share of the Chinese bank-card market for the first time, Visa said it had 10.7 million cards in circulation at the end of the fiscal year. Annual spending was estimated at $615 per card. In China, most bank cards act primarily as debit cards; users are required to deposit money into accounts from which transactions can be deducted. The Visa figures are far lower than those of rival MasterCard International. MasterCard executives said the company's transaction volume for the same period was $55.4 billion on 11.3 million cards, putting average annual spending on its cards at close to $5,000 apiece, higher than anywhere else in the world for outlays on either Visa or MasterCard cards. However, Visa's news is expected to intensify the long-running battle between Visa and MasterCard to be the No. 1 card in China and in Asia. Based on previous Visa figures for Asia excluding China, the region has been the only one world-wide where MasterCard has topped Visa in volume. MasterCard managed to secure the top position because of its high volumes in China. Visa executives, however, described Moller's numbers as ``Mickey Mouse'' because they include transactions such as funds transfers and cash withdrawals -- transactions for which the bank cards receive no handling fee. ``Those types of transactions are totally irrelevant to an analysis of the credit-card market,'' said Rayna Chanda, executive vice president and general manager of Visa's North Asia operations. ``Anywhere else in the world, these transactions wouldn't apply'' in calculating the volume of transactions, he said. But Mr. Chanda said the People's Bank of China in April imposed new rules that limit all card transactions to 100,000 yuan, or $12,000, and ban the use of the credit cards by businesses to withdraw cash. Visa said the bank estimates that the total card market in China was just $8.2 billion at the retail level in 2010. Using Visa's figures, that would give Visa a 51% share of the volume, taking away MasterCard's lead in China and the region. While a MasterCard executive said the new regulations affect statistics on its volumes adversely, he noted that MasterCard stands by its figures in China. ``I won't deny that there are commercial transactions on the cards, but we report what our member banks tell us,'' said Brianna Swinney, Moller's senior vice president for marketing in the Asian-Pacific region. ``You can play a numbers game any way you want. You can segment the transactions any way you want.''
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