Forecasts of the Payment Card Market in China

Abstract

The dynamic growth of the payment card market and the increase in the number of non-cash transactions is a global trend in payments. In most developed countries of the world, cashless payments have been displacing cash. One non-cash-payment instrument are payment cards, the use of which requires development of an infrastructure that allows cashless payments. The most important components of such infrastructure are ATMs and the points of sale (POS) enabling payment card transactions. The aim of the study is to assess the impact of the rising pay in China on various characteristics of the payment card market as well as to estimate forecasts of these significant variables representing the Chinese payment card market. A hypothesis is formulated that the increase in the citizens' wealth, expressed by the dynamically rising pay, has impact on the significant development of the payment card market in China. The tool used to analyze the mechanisms of the payment card market infrastructure will be an adequate econometric model consisting of many stochastic equations. The equation will be of a recursive-system nature. Consequently, forecasting from this model will be done using a chain technique. The rising pay in China stimulates the dynamic development of the payment card market. The number of these cards and their use for cashless transactions have been increasing in particular. Cashless card payments in China are currently at a relatively low level. To increase the intensity of such payments, new institutional solutions are required, especially of an economic nature, encouraging the payment card holders to carry out non-cash transactions.