(Yicai) Jan. 21 -- More and more Chinese lenders have been downsizing their credit card operations in a pivot away from an aggressive decade-long expansion, mainly because of changes in the market environment.

More than sixty credit card business centers have shut down in China since the beginning of last year, according to incomplete statistics compiled by Yicai. The latest one to close was Bank of Guangzhou’s center in Zhongshan, the lender’s second this year.

The number of credit cards and combination cards issued by Chinese banks has also decreased, down to 707 million in the third quarter of last year from the 807 million peak in the third quarter of 2022, according to data from the People’s Bank of China. Moreover, Chinese lenders have also started to shut down their credit card business-focused apps and transfer related functions to their general-purpose apps.

“Banks cutting credit card business centers is an inevitable outcome of the transformation of the banking sector,” Dong Zheng, senior credit card expert, told Yicai.

With the popularization of mobile broadband, the conventional offline credit card promotion model is gradually losing its edge, Dong noted, adding that the credit card market is becoming saturated, making it difficult to convert the huge human resource costs of many credit card business centers into effective output.

The credit card business will not disappear but enter a new development stage, as banks tend to incorporate related functions previously handled at the centers into their local branches to cut operating costs, Dong said.

More and more banks will close their credit card business centers, Dong predicted. However, he explained that this does not mean that the industry is entering a recession period. Instead, it shows that the operational logic of the credit card business is undergoing a restructuring.

Going forward, the development of the credit card business will likely focus on the management of existing customers, the improvement of digital capabilities, and the deepening of the merchant ecosystem, he pointed out.

Editors: Tang Shihua, Futura Costaglione