Guangshen Railway Co. Ltd. is partnering with the Industrial and Commercial Bank of China and card issuer China Unionpay to jointly issue a dual-currency contactless credit card in Hong Kong, the companies announced in recent joint statement.
Shenzhen-based Guangshen Railway is a major railway operator in southern China that offers passenger-rail service between Hong Kong and mainland China. The companies are using the new card to target businessmen who frequently commute between Hong Kong and the mainland, according to the statement.
The multifunction card, the first China Unionpay credit card issued abroad with a Chinese bank, integrates the ticket account with separate accounts used for transactions initiated in Chinese yuans and Hong Kong dollars.
“By adapting the PBOC2.0 (smart card) standard, the Chinese version of Visa's EMV2000 standard, the card enables contactless payment,” Wang Huan, an analyst at Beijing-based research firm CCID Consulting, tells PaymentsSource. ”While the two standards are compatible, adding the contactless-payment function is a major improvement because it's where the payment industry is heading to.”
The People's Bank of China, China's central bank, developed the PBOC2.0 standard and introduced it in 2005. In late 2007, ICBC issued the country's first PBOC2.0 standard IC credit card in Beijing as a trial.
Though contactless payment is a growing trend, it will take China a long time to adapt it nationwide, Wang says. ”All the ATM machines and POS machines have to be replaced or rebuilt to make them compatible with the contactless technology, and it is a huge investment,” he says, noting that is one reason why IC payment cards still also have a magnetic stripe.
China Unionpay expects to issue some 20 million IC payment cards, including debit card and credit cards, in the next five years.
