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Credit Cards Come To China
China's consumers are growing richer and more comfortable taking on debt—thereby sparking the interest of foreign banks in issuing them credit cards. The Chinese market for short-term debt could be worth $3 billion or more by 2010, but building a new infrastructure to acquire and serve credit card customers would be costly. A better strategy: teaming up with local banks whose customers are already comfortable buying with plastic.
The take-away:To tap into one of the world's most lucrative emerging markets for consumer credit, financial firms should partner with Chinese banks to offer quasi–credit cards, which append a credit line to debit cards.
Articles provided by The McKinsey Quarterly
© 1992-2003 McKinsey & Company, Inc
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