September 29, 2015
The third-party payments industry dominated by Internet and mobile payments, prepaid card, POS, etc., crossed 23.3 trillion transactions with a YoY growth of 35.47%. There are 270 licensed companies processing transactions of which Beijing has the largest number—58.
China UnionPay (CUP) is a domestic bank card issuer founded in 2002 and operates under the approval of central bank of China. By 2015, CUP reached 36.4% of market share with more than 260 million Internet and mobile payment users, and transaction value exceeding $1.9 trillion globally. According to CUP’s official website, the company is the biggest international bank organization based on the total number of issued cards and transaction value, with an annual growth of nearly 20%.
CUP has enabled card acceptance in 150 countries and regions with issuance in more than 40 countries and regions. Having the world’s largest cardholder base, CUP’s extensive and strong payments network creates an unwelcoming environment for Visa and MasterCard despite the governmental policies that open the local payment market for foreign companies.
According to The Nilsen Report on purchase volume, CUP market share in 2014 was 73% (almost $7 trillion) while Visa’s and MasterCard’s market shares are 15% and 8% respectively. Statistics on the worldwide purchase transactions for 2014 show a record 52.3% growth for CUP in comparison to Visa 10.1% and MasterCard 13.6%.
The Q1 2015 China Third-Party Online Payment Report indicates the YoY growth of third-party online payments in Q1 2015 hitting 29.8% with a QoQ growth of 3.4%, which signifies the trend of online payments market establishment and rapid growth in China.
Web agency Go-Globe provided estimates of the third-party mobile payments market in China for the total transaction value: - 2014 – $0.94 trillion
- 2015 – $1.42 trillion
- 2016 – $1.9 trillion
- 2017 – $2.39 trillion
- 2018 – $2.87 trillion
Statistics on mobile transaction volume provided by the agency demonstrates the dominance of Alipay as a mobile payment provider with a market share of 79.9%. CUP’s share of mobile transaction volume is 0.4%. Other major providers listed are:
- Alipay - 79.9%
- Tenpay - 8.9%
- Lakala - 6.5%
- China Mobile - 0.6%
- CUP - 0.4%
By having a monopoly on bank transactions in China for just over a decade, CUP became the world’s largest card brand. Widespread presence and skyrocketing growth statistics were reached through an established network of nearly 1 million ATMs and more than 7 million merchants abroad. Cross-border service expansion for online payment is accessible for the remarkable number of 8 million merchants in the Asian region and most of the European countries.