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On the other hand, Discover Card says that it is already widely accepted in China. It was doing that by partnering with Union Pay. I wonder how that works, especially since DiscoverCard doesn't charge even a foreign exchange fee.
And what about Amex? Must we leave home without it?
Note also that the article says you can't use Visa or MC in most places, which is true. But I've had no problem buying Starbucks city mugs across Sichuan Province using Fidelity Amex (these stores also accept MC/VISA).
Right now, China UnionPay has a virtual monopoly in the country's bank card market, with Visa and MasterCard relying on their network and paying a fee to process transactions in China.
But this development could open up the market to both companies directly, according to Reuters.
Starting on June 1, foreign companies will be able to apply for licenses for bank card clearing businesses in China. Reuters' report cited comments from China's central bank, which said, "Opening up the market for bank card clearing will help improve the country's card-clearing services through market competition."
It will be interesting to see how this unfolds. Credit cards are used by professionals and high net wealth people but the middle class is still in cash mode. This is true for a lot of Asia. Advertising may be the key for Visa and MC.
I can use both Visa and MC in pretty much everywhere I went even in the third tier cities, believe it or not their bank system is quite advanced and ATMs are everywhere, I normally used my BAC card to get the local currency without any issue.
I think the usage of cards is not an issue but that Union Pay handles all the clearing. This would give Visa and MC the opportunity to get into the clearing end as well. If I have this wrong let me know.
David - are you able to use MC and Visa as credit cards, or just at ATMs? My experience was that one could not use them to purchase items in most shops.
(To add to John's comment about cash mode - acceptance of any credit card did not seem to be nearly as common as it is in the US or Europe. But it's been a couple of years now, and my memory on this point may be fuzzy.)
I think what might be the point here is that the mom and pop shops and small stores have not gotten the credit card equipment to accept cards. The multinational companies and larger stores in the malls should have them.
My experience in the Philippines for what it's worth, is that credit cards were and still are slow to be accepted in the mainstream. The large cities will have more acceptance but again the smaller stores and shops do not have the equipment to run the card. Once out of the main metro urban areas, it is hard to use the card except for ATM. But it is slowly catching up.
The society over here is very cash oriented. It is common to see someone buy a new car for example and have a satchel filled with millions of pesos. I suspect China is similar in this respect. The card's target customer base is businessmen and women who travel a lot and the higher wealthy class. Interest rates on cards here are very high.
@msf, I was in China two month ago, visited several third tier small cities, all hotels and department stores I stayed and shopped accept Visa Or MC card. For the small charges In mom and pap shops I used local currency, have no trouble to use BAC visa ATM card to get the local currency from any ATMs, to avoid ATM fees I used China industrial and construction bank.
I think the usage of cards is not an issue but that Union Pay handles all the clearing. This would give Visa and MC the opportunity to get into the clearing end as well. If I have this wrong let me know.
Comments
And what about Amex? Must we leave home without it?
Note also that the article says you can't use Visa or MC in most places, which is true. But I've had no problem buying Starbucks city mugs across Sichuan Province using Fidelity Amex (these stores also accept MC/VISA).
But this development could open up the market to both companies directly, according to Reuters.
Starting on June 1, foreign companies will be able to apply for licenses for bank card clearing businesses in China. Reuters' report cited comments from China's central bank, which said, "Opening up the market for bank card clearing will help improve the country's card-clearing services through market competition."
http://www.businessinsider.com/mastercard-and-visa-may-enter-china-2015-4
(To add to John's comment about cash mode - acceptance of any credit card did not seem to be nearly as common as it is in the US or Europe. But it's been a couple of years now, and my memory on this point may be fuzzy.)
My experience in the Philippines for what it's worth, is that credit cards were and still are slow to be accepted in the mainstream. The large cities will have more acceptance but again the smaller stores and shops do not have the equipment to run the card. Once out of the main metro urban areas, it is hard to use the card except for ATM. But it is slowly catching up.
The society over here is very cash oriented. It is common to see someone buy a new car for example and have a satchel filled with millions of pesos. I suspect China is similar in this respect. The card's target customer base is businessmen and women who travel a lot and the higher wealthy class. Interest rates on cards here are very high.
http://seekingalpha.com/news/2552766-visa-mastercard-set-to-enter-china
Regards,
Ted
Then again.…