MasterCard Inc and Rural Credit Cooperatives in Zhejiang province have jointly launched the Fengshou Card, the first rural credit card issued by provincial cooperatives in China, in a move they said further advances financial innovation and inclusive financial services in the countryside.
The State Council in January promised to make banking and lending services more inclusive, meaning making them more accessible to ordinary people, especially in remote areas.
The first Fengshou card, or literally Harvest Card, was issued in Yiwu in the province.
Yiwu is a hub of small commodities trading of more than 12,000 permanent foreign residents from all over the world, and more than 30,000 Chinese traders who frequently travel internationally and who need process payments services, according to a report in the Yiwu Daily.
Providing inclusive financial services has been one of the MasterCard's business focuses in the China market, the company said.
The payments and technology companies plan to introduce more diversified solutions to cardholders in various segments, said MasterCard. These will enable cardholders in rural areas and rural small and medium-sized enterprises to complete payments and transactions in a convenient, safe and rapid manner, said MasterCard's China head Chang Qing.
Cardholders in China are increasingly traveling following the launch of the Belt and Road Initiative, and going global for business expansion, he said.
MasterCard sees great potential in the Chinese market and is deploying a lot of resources in the Chinese mainland, Chang said.
"Inclusive financial services offer great potential for market players, and there are many gaps to be filled between cardholders' needs and the current offerings of services providers. MasterCard has been working with the RCCs of several provinces, and more products will be launched to popularize credit card services, giving more rural cardholders smooth payments and transaction experiences when they travel abroad," he added.
Credit cards issued by the RCCs may help their segment to improve their financial services and fulfill currently unmet cardholder demands, said a circular from the China Banking Regulatory Commission.
Analysts said payment services providers who can enhance their credit card services for rural cardholders will gain a competitive edge in the future, as this part of the market has a great potential for growth.
"Credit card services are actually underrepresented in rural areas in terms of quality, quantity and developed services compared to that in urban areas," said a payment market research report from Beijing-based Bosi Data Research Center.
According to data from the People's Bank of China, the central bank, about 457 million debit cards were issued in 2015 to some 930 million rural residents, while only 27.5 million credit cards were issued in the same year.
Credit cards have been used in China for more than 30 years with a history of significant development. In the next few years, said analysts, more change is to come. Digitalization, mobile payments and more innovation will help accelerate the advance of the sector, and more inclusive and tailored-made services will be provided to cardholders, bringing them an evolving payment system, said Dong Zheng, credit card expert and editor-in-chief at 51credit.com.