MasterCard International said that its payment volume in China surged to $10 billion in the second quarter, making China second only to the United States in MasterCard activity.

Comparison Called Misleading

The New York-based card association said it has grown by triple-digit percentages in China for two consecutive years. And the number of its cards in China increased by 200% over the last year, to 2.2 million -- meaning that MasterCard has eight out of 10 credit cards issued in China, the company said.

The market-share claim is at odds with a statement by Visa International that "at least two million" of its cards have been issued by Chinese banks.

A Visa spokesman also argued that comparisons between volumes in China and in the United States are misleading. In China, the card networks are used as corporate payment systems.

The president of MasterCard's Asia/Pacific region, James A. Cassin, said: "The volume started to build during the latter half of 1991, exploded in 1992, and continued at a very high pace through 1993."

"The volume data include the special use of MasterCard cards to support large commercial purchases in what has become the fastest expanding economy in the world," Mr. Cassin added.

Visa Puts Volume at $9.3 Billion

The Visa spokesman said that volume can pick up substantially with the addition of each new corporate card program, making growth statistics appear more impressive than they actually are. In August, Visa announced its Chinese volume for the 12 months ending March 31 had grown by 333%, to $9.3 billion.

The true measure of leadership in a market such as China is how advanced the payment system is, the Visa spokesman said. He said Visa's system in China is more advanced.

A spokesman said MasterCard's charges are carried on its proprietary transaction processing network, over an electronic hookup provided by the Bank of China. Next year, the association and its Chinese banks will install a system allowing the authorization of transactions at merchant outlets, she said.

|Enormous Potential'

Although the associations present conflicting statistics, they do agree that China "has enormous potential," the Visa spokesman said.

To convince Chinese bankers of the superiority of card-based payment systems, he said, both card associations are encouraging the use of cards to replace letters of credit.

Ultimately, the associations hope, the acceptance of cards as a payment system will lead to an American-style consumer credit card market.

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