Union Pay bumps Visa to No. 2 spot in global payments value
According to a new report from RBR, "Global Payment Cards Data and Forecasts to 2021," China's UnionPay is now the largest scheme in terms of value of card payments. Market share for the scheme jumped 5 percent to 37 percent, up from 32 percent in 2014.
Visa now holds second place with a 32 percent share and MasterCard remains at third place with a 20 percent share of the $21.6 trillion spent using payment cards in 2015.
In terms of card numbers, UnionPay has been the largest scheme since 2010. By the end of 2015, there were 5.3 billion UnionPay-branded cards, accounting for 41 percent of the card base worldwide.
Last year, the total number of payment cards in circulation worldwide increased by 8 percent to 13 billion. Though impressive, growth is actually down from 11 percent in 2014, following a slowing of expansion in the Chinese market, according to the London-based research and consulting firm.
Driven largely by financial inclusion efforts, the Middle East and Africa and Asia-Pacific were the fastest-growing markets in 2015, with card numbers up 13 percent and 10 percent, respectively.
Together, UnionPay, Visa and MasterCard account for 89 percent of worldwide expenditure, with the remainder made up by travel and expense schemes (i.e., American Express, Diners Club and JCB), Discover and domestic-only bank and private label cards.
There are, however, significant differences in card mix at the regional and country level; for example, Iran consists entirely of domestic scheme cards as a result of international sanctions, while JCB accounts for 22 percent of expenditure in its home market of Japan.
While UnionPay's growth is impressive, it has been a result solely of the rapid expansion of the Chinese market. UnionPay remains a predominantly domestic scheme with a share of just 0.5 percent of expenditure outside of China. By contrast, Visa and MasterCard maintain command shares of 50 percent and 31 percent respectively.
"Despite its rapid recent expansion, increases in UnionPay's share will be more gradual going forward as a result of slowing growth in its home market," said Chris Herbert of RBR. "Moreover the Chinese market is opening up to foreign players following the end of UnionPay's monopoly on domestic bank card clearing in June 2015."