China UnionPay Reports Growth In Migrant Card Scheme

Consumers made transactions worth 8 billion yuan (US$1.7 billion or 905.2 million euros) using China's migrant workers debit cards as of 31 Dec., up 139.5% from 3.34 billion yuan  as of the end of 2007, a spokesperson for China UnionPay, the payment card network that helps administer the program, tells CardLine Global. The People's Bank of China established the service in 2005 to enable migrant workers to deposit funds in bank accounts in cities where the migrants work. Accountholders can withdraw funds from rural credit cooperatives near their homes. Some 164 banks in China offer the service, which was expanded to Tibet last month, the spokesperson says. Workers using the service pay fees equal to 0.8% of the transaction amount. China has approximately 140 million migrant workers, Zhang Hua, a China-based banking analyst for United States-based Celent LLC, tells CardLine Global. Other card schemes charge transaction fees not much higher than what the migrant worker program charges, and this will make it difficult for the program to gain market dominance, he adds.