Chinese banks will replace magnetic stripe cards with smart cards by 2015, according to an official from China UnionPay.
UnionPay also is planning to modify the point-of-sale terminals at all of its 2.3 million merchants across China by the end of 2011 to accept the cards, Xu Luode, UnionPay president, said at an economic forum in Beijing earlier this month.
Major banks in China already have begun issuing smart cards. The country’s biggest lender, Industrial and Commercial Bank Ltd., for example, says it had issued more than 5.5 million chip cards, including debit cards and credit cards, as of the end of May. Moreover, 90% of its ATMs in China accept the cards.
Xu did not specify which standard the chips will be adapted for, but the chip credit cards ICBC has issued comply to the globally accepted EMV standard.
But more still needs to be done to complete the migration, notes Wang Huan, an analyst at Beijing-based research firm CCID Consulting.
“There will be some transition stage when banks could issue cards combined with magnetic stripes and [integrated circuit] chips, just like those issued in Shenzhen,” she tells PaymentsSource. Both ICBC and the Bank of Communications Ltd. are issuing dual-function cards in Shenzhen, but most Chinese banks still issue magnetic stripe cards as default.
“We offer [integrated circuit] cards only after required by the card applicants,” a customer service representative of ICBC’s Shanghai operation says.
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