Wendy Atkins reports on how payment card providers are preparing for the 2008 Beijing Olympics by ensuring that visitors can pay easily for all their needs.

While the world’s top sports stars are counting down the days to the start of the 2008 Beijing Olympics, the payments industry is gearing up to ensure that visitors to the games will be able to make payments for hotels, transport, food and Olympic memorabilia easily and securely.

Official Olympic Games sponsor Visa – which is the exclusive payment card for the event – is focusing on duplicating what it offers in every market to ensure that visitors to Beijing get the same card acceptance and ATM services as they do at home. “Visitors will be very comfortable that their cards will be accepted not only in standard merchandise locations, but also in payment for food and beverages,” says Scot Smythe, senior vice-president, sponsorship and event marketing, at Visa International.

“We have to make sure all the Olympic venues, including the many outside Beijing, have exclusive card acceptance points. And in those areas, we will also ensure we have got good card acceptance in the locations where international visitors are likely to venture, so we can also showcase acceptance to domestic cardholders.”

Visa is not the only firm that is gearing up to distribute more cards and deploy infrastructure to boost acceptance. Other major initiatives are continuing China’s transformation into a card payment society, with consumers in the big cities leading the way by using their bankcards at supermarkets, shopping malls and hotels.

MasterCard is playing its part in this transformation. For example, in December 2005, in collaboration with the Industrial and Commercial Bank of China (ICBC), it launched China’s first EMV-compliant card. MasterCard has also linked up with other issuers to offer co-brand card programmes, such as the Titanium Card, issued in collaboration with Hua Xia Bank and targeted at China’s growing base of affluent consumers.

Proliferation of cards

While cards payments are burgeoning, thanks to China’s growing economy, next year’s event is seen as an opportunity to boost card usage. Wenli Yuan, an analyst at consultancy firm Celent, says: “The 2008 Olympics is helping to speed up this process of moving from cash to cards. About 4.6 million international visitors are predicted to visit Beijing during 2008, and 800,000 of those will arrive in Beijing during the games. It will promote the bank card payment environment as well as bank card issuance in the Olympic cities.”

Mr Smythe agrees: “Efforts have been stepped up over the past three years to expand acceptance across China, and several thousand merchants have been added in the past six months.”

Banks are reaping the benefits of this increased investment in card infrastructure and usage. According to research carried out by the Economist Intelligence Unit on behalf of First Data International: “With over one billion cards now in circulation in China – and more than 200 million new cards issued in 2006 alone – it is not surprising that retail bankers are optimistic about credit cards as well as bank accounts.”

Technically speaking

Card companies are focusing on providing technologies such as EMV and magnetic stripe-based cards. Although most Beijing citizens are familiar with using contactless technology for activities like using public transport and entering tourist destinations, such as the Badaling Great Wall, it will not be widely used at Olympic venues.

“Contactless is still being evaluated but it requires a little bit more support in terms of systems network, which right now China can’t support,” says Mr Smythe. “But we’ve got a year left to go and we’re confident that we will be able to at least showcase part of the technology in some of our venues.”

Mobile terminal technology could be widely deployed in stadiums. Claire Neo, Asia marketing manager for Verifone, says: “Since most of the Olympic activities take place inside sports stadiums, mobile technology is best to provide maximum accessibility to the point of sale at the point of transaction.”

Progress has also been made with internet-based transactions. “Internet payment has grown explosively in recent years and is particularly strong in those areas that require no physical delivery of goods, such as digital entertainment and e-ticketing,” says Chen Yu, vice-president of marketing at Yee Pay, an active payment service provider. “However, we think offline payments using mobile and fixed lines have huge potential because of the much bigger user base (450 million mobile users/400 million fixed lines versus 130 million internet users).”

Security

While most bank cards rely on standard security mechanisms that are used commonly worldwide, China has joined the ranks of countries implementing biometrics for verification. Dave Wu, chairman of the board at Chinese technology firm Smart Unicorn Solutions, says: “The fundamental character of such systems is to integrate a biometric-based authentication mechanism into both the back-end payment processing platform and the front-end user terminals (such as smart cards) or digital devices (such as mobile phones) to achieve a better assurance of the payer’s identification.”

The banking industry may have something in common with Olympic athletes. Competition for the ‘gold medal’ of card acceptance is fierce, but the development of the payments industry in China is only being achieved thanks to the hard work that has taken place over many years to develop payments and technology standards. And to achieve that level of industry collaboration, the Olympic spirit of mutual understanding and solidarity has had to be embraced.

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