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The number of bankcard transactions in the city doubled last year and is expected to grow rapidly in the future, but Shanghai still has a long way to go before becoming a cashless society.
Despite government efforts to build the necessary infrastructure and encourage the use of credit and debit cards, only 7 percent of all retail sales in the city during the first six months of 2002 were conducted using plastic, far from the 40 percent of sales cards are used for in developed countries, according to city officials.
Bankcards were used for 106.5 billion yuan (US$12.84 billion) worth of transactions in Shanghai last year, more than doubling the figure for 2001, according to a report issued by the People's Bank of China yesterday.
Economists believe the use of bankcards in a country grows rapidly when its per capita GDP reaches US$1,000 to US$10,000. Shanghai's per capita GDP was US$5,000 last year, up 10 percent from 2001.
"Shanghai has a golden opportunity to promote the development of its bankcard industry according to experiences in Western countries," said an official with state-backed China UnionPay Co. Ltd., which is working to unify the nation's vast bankcard networks.
The central bank has set an ambitious goal of boasting bankcard transaction to account for 25 percent of all retail sales in the city by 2005.
To cement the city's role as a regional financial center, the local government announced a three-year development plan to make Shanghai the national center for bankcard capital settlement and the home for domestic card issuers.
"The fundamentals for Shanghai to become the center of the national bankcard industry are well in place," said Sun Jianping, deputy director of the Shanghai government office of information technology development.
"The key issue now is to popularize the habit of shopping with bankcards," added Sun.
All 17 local bankcard issuers connected their bankcard networks together by the end of 2001, creating a central network used by 35.65 million bankcard holders in the city by the end of last year, an increase of 27.5 percent from a year earlier.
Both domestic and overseas card issuers are flooding into Shanghai, betting on the sector's potential to grow rapidly.
(Shanghai Daily January 23, 2003)
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