Global protectionism is becoming more and more discussed by the US business leaders. GE CEO Jeffrey Immelt spoke about “protectionist global environment,” which is not only associated with locomotives and gas turbines. Commerce is mainly based on retail electronic payments. As for countries, many of them aim at developing and protecting their local payments networks as national champions.
Payment Networks Worldwide
China UnionPay is the biggest national payments champion of all networks. It boasts 5.4 billion badged cards. CUP was established in 2002 by a decree from the People’s Bank of China. The network is owned by 85 banks, the largest of which are state-owned.
Russia launched its national network Mir in December. The network is run by the country’s central bank. Alipay, which has 450 million users, and Tenpay are domestic eCommerce payments giants in China. They are starting to compete with CUP at the physical POS (point of sale). In 2012, the National Payment Corporation of India launched Rupay.
In Brazil in 2011, Lo and behold, the state-controlled institutions Banco do Brasil SA and Caixa Econômica Federal, and Banco Bradesco launched Elo, which made up 7% market share.
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Quite naturally, not all national networks had success. Banks based in Britain sold Switch to MasterCard. Banks in Finland, Ireland, the Netherlands, and Poland shut down their debit networks known as Laser, Pankikkorti, PIN, and Polcard, respectively.
The US payment-networks market is the most competitive one in the world. In the 1980s, there were 135 ATM and 35 debit regional networks owned by banks. The market consolidated to 6 national debit networks, and none of them were owned by banks. Those that survived were used by bank owners or the armed forces.
Current open competition has given the market Accel, American Express, Discover, NYCE, MasterCard, PayPal, Star, and Visa. More network competition could be beneficial for the whole world.