Credit cards are the most common type of payment method found in the world today. While most people know companies such as Visa and MasterCard by heart, neither of these is the market leader. New research by RBRB goes to show UnionPay is the largest card company in the world based on value processed.
UnionPay Takes The Reigns From Visa
The name UnionPay has been making waves in the financial sector throughout the past few years. For a payment solution that is only accessible by Chinese customers, the amount of money processed by this card issuer has been skyrocketing. This seems to fall in line with the 8% increase in payment cards in circulation, according to the RBR report.
Albeit the biggest growth was noted in the Middle East, Africa, and Asia-Pacific, China remains a very dominant market in this industry as well. UnionPay, Visa, and MasterCard make up 89% of the world’s expenditure in 2015. However, Visa is no longer the largest player in this field, as they have been overtaken by UnionPay.
To put this into perspective, 37% of US$21.6tn spent in 2015 was done through UnionPay, Visa comes in second place with 32, and MasterCard is well behind with 20%. This is quite an increase for the Chinese payment giant, as their share was “only” 32% back in 2014. If this trend continues at this rate, UnionPay will handle nearly 50% of yearly card transaction value by 2020.
RBR’s Chris Herbert told the media:
“Despite its rapid recent expansion, increases in UnionPay’s share will be more gradual going forward as a result of slowing growth in its home market. Moreover, the Chinese market is opening up to foreign players following the end of UnionPay’s monopoly on domestic bank card clearing in June 2015”.
It comes as no surprise to find out Visa and MasterCard are looking to venture into the Chinese payments market0. The government has opened up this market to foreign players, assuming they can adhere to some specific guidelines. Mastercard announced yesterday they are looking into the matter, although a cautious course of action is advised.
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