The Olympics is an opportunity that all those involved in card payments are determined to make the most of. Wendy Atkins reports.
With the years of planning for the 2008 Olympics finally reaching a climax, the cards payments sector is among the clutch of industries set to profit from the Games. The event is certainly a major opportunity for banks to drive card penetration in China. But will payments cards turn out to be the ‘Thorpedos’ of the Beijing Olympics, winning everything up for grabs? Or will they be the ‘Eric the Eels’ of the payments world – merely lucky to be there and taking part?
China’s payments card business has seen significant developments in recent years, with efforts being made to extend infrastructure and introduce more debit and credit cards as well as contactless payment cards. According to the central bank, the People’s Bank of China (PBC), 1.2 billion bank cards (approximately 1.1 billion debit and 50 million credit) were issued in 2006, with a total transaction volume of 64,000bn yuan ($9300bn). And, in a move that is opening up the nation’s financial markets further, foreign banks have recently been allowed to issue local currency renminbi bank cards independently, without a local co-brand partner.
Terminal test
Terminal manufacturer VeriFone is one of the suppliers to the Games. “More than 300 units of the Vx670 and 130 of the NURIT 8400 were delivered to China for use on site,” says Bill Nichols, VeriFone senior vice-president of global marketing and general manager of Asia Pacific operations. “These will be allocated to all formal and testing venues in Beijing, including the conference centre, media centre, Olympic theme park, Chinese Olympic committee finance department, as well as venues in the five other Olympic cities. More than 2000 VeriFone Vx510 and Omni 3750 terminals will be used for ticketing from Bank of China ticketing sales points.”
Giesecke & Devrient is producing cards for China Everbright Bank and has supplied 200,000 to date. These special Olympic-edition Visa credit cards sport a vertical design displaying the five official Games mascots.
Kiosk roll-out
As an Olympic sponsor, Visa has been working with the Beijing Organising Committee for the Games of the XXIX Olympiad (BOCOG), the China National Tourism Administration, the Beijing Tourism Administration (BTA) and the Pacific Asia Travel Association to help develop the country’s payment infrastructure and tourism potential among key destination markets in the lead-up to the Games.
Visa and BOCOG are installing and operating 62 in-venue information kiosks to provide Games-time information services onsite. Visa is also working with the BTA and the Beijing Youth League to create and operate 55 offsite information kiosks, including six at the Capital Airport as well as at key high-traffic districts in Beijing. In addition, Visa and the BTA are launching the Best Merchants in Beijing scheme, to encourage merchants at numerous tourist attractions in the capital to accept international payment cards.
Together with its client banks in China, Visa has installed more than 90,000 ATMs and signed up 216,000 merchant locations or outlets throughout the country to help prepare for the expected influx of international visitors.
Infrastructure progress
Development of the cards infrastructure has been promoted by a PBC group, established in March 2007. In June, PBC deputy governor Su Ning reported that targets have essentially been met and the payment environment in the six Games host cities has been improved. But he also called on all participants in the country’s payment network system to step up their efforts to ensure that it is ‘foolproof’ for the Olympics.
By the end of March, there were 185,000 designated merchants in the six Olympics host cities with more than 60% of outlets having designated merchant status. A total of 340,500 point-of-sale machines plus 22,000 ATMs have been installed and more than 60% of ATMs can now accept bank cards issued by foreign countries.
Contactless boost
According to Wenli Yuan, senior analyst at financial services consultancy Celent, the Olympics is also helping to boost contactless card usage in China.
“MasterCard and Industrial and Commercial Bank of China (ICBC) have been working together to issue the PayPass card,” she says. “PayPass cardholders from all over the world will be able to use contactless cards at some tourist sites, cinemas, supermarkets and restaurants. ICBC has also worked with Visa and issued a Visa payWave contactless credit card.”
Mr Lodge agrees: “The Olympics offers a real opportunity: with the international card schemes promoting contactless technology and the move of many of the transit systems to contactless technology, this may prove a chance for Chinese consumers not only to adopt cards but to leapfrog straight to contactless as acceptance points move directly to the latest terminals.”
