Credit card penetration remains stubbornly low across Asia’s three largest emerging economies despite their massive payments markets. China, India, and Indonesia are grappling with regulatory pressures, economic headwinds, and fierce competition from digital payment alternatives that are reshaping the credit card landscape in the region. While China’s payments market stands at $40 trillion, India’s at $1.74 trillion, and Indonesia’s at $362 billion, credit card adoption rates tell a strikingly different story.
Credit card penetration in China remains below 40 percent, while India and Indonesia lag even further behind at just 3 percent and 6-7 percent respectively, according to industry reports. The growth trajectory for credit cards in these markets is not keeping pace with broader payment sector expansion, raising questions about whether these economies will ever match the adoption rates seen in advanced Asian markets like Japan, South Korea, Hong Kong, and Taiwan.
China’s Credit Card Market Faces Contraction
China’s credit card market has experienced a significant downturn, with nearly 100 million cards canceled since 2022, according to industry data. The total number of cards in circulation fell to approximately 707 million by late 2025, marking a notable reversal from previous growth trends.
Tighter regulatory oversight has emerged as the primary catalyst for this decline. In 2022, Chinese regulators introduced strict rules to curb what they termed “disorderly expansion” of the credit card sector. Banks now face requirements limiting individual customers to six credit cards and must proactively eliminate dormant cards that have been inactive for more than 18 consecutive months.
Additionally, China’s slowing economy has weakened consumer demand and elevated delinquency rates. Major banks have responded by shifting from aggressive customer acquisition strategies to quality-focused management approaches, resulting in the closure of 63 bank-run credit card centers in 2025 alone. International card issuers are also scaling back operations, with HSBC announcing its withdrawal from mainland China’s credit card market in late 2024 after struggling to achieve profitability.
Meanwhile, the dominance of Alipay and WeChat Pay in China’s payments ecosystem continues to limit credit card expansion potential. These platforms have incorporated traditional credit card functionality through products like Ant Group’s Huabei and WeChat’s buy now, pay later service Fen Fu, offering lower costs and greater convenience within their respective digital ecosystems.
India’s Credit Card Growth Decelerates
India’s credit card market, while more positive than China’s, experienced significant deceleration in 2025 amid intensifying regulatory scrutiny from the Reserve Bank of India. In the second fiscal quarter of 2026, banks issued 4.4 million new credit cards, representing a steep 28 percent annual decline from 6.1 million cards issued during the same period the previous year, according to industry reports.
New RBI regulations requiring deactivation of cards unused for 365 days have significantly impacted issuance volumes. Additionally, tightened disclosure requirements and underwriting filters have caused some banks to reduce credit card issuance to ensure compliance. The RBI also increased capital requirements for unsecured retail loans in late 2023, making card issuance more expensive for banks.
The regulatory response addresses rising delinquency and asset quality concerns linked to higher consumer spending and easy access to unsecured credit. Unpaid credit card bills overdue by three to twelve months rose by 44 percent to over ₹33,000 crore ($387.3 million) by March 2025, according to financial data. Defaults reached 1.8 percent by mid-2024, with non-performing assets in the credit card segment surging 28 percent.
However, integration with India’s dominant United Payments Interface, which has 400 million to 500 million users, offers promising long-term prospects. According to a recent Bernstein analysis, UPI-linked credit card transactions now represent approximately 40 percent of overall credit card transaction volume, up from just 10 percent at the end of the 2024 fiscal year.
Indonesia Confronts Structural Bottlenecks
Indonesia’s credit card market faces structural and competitive challenges that result in persistently low penetration rates. Bank Indonesia maintains high eligibility thresholds, requiring applicants to demonstrate relatively high stable incomes and formal credit histories. Many Indonesians cannot provide the documentation required by traditional banks.
Infrastructure limitations also hamper growth. Indonesia has significantly fewer point-of-sale terminals per million inhabitants compared to regional peers, making credit card usage difficult outside major cities. Legacy platforms used by incumbent lenders lack modern features like instant virtual card issuance or seamless digital ecosystem integration, reducing their appeal to Indonesia’s large tech-savvy youth population.
Nevertheless, the biggest impediment to credit card growth in Indonesia is the presence of compelling alternatives. Digital wallets like GoPay, Ovo, and Dana, as well as buy now, pay later services like Kredivo, offer diverse credit options targeting underbanked and unbanked Indonesians with minimal credit checks. One forecast predicts the BNPL market will grow at 9.6 percent annually to reach $13.6 billion by 2030.
Strategic Adaptations by Card Companies
Despite challenges, the sheer size of these markets means even modest increases in credit card penetration could prove lucrative for card companies. American Express has been particularly ambitious in China, forging partnerships with mobile payment leaders. In February 2025, it established a tie-up with Alipay allowing American Express cardholders to link their cards to Alipay’s digital wallet, adapting to local mobile payment preferences.
In India, U.S. card giants face stiff competition from domestic firm RuPay, which the Indian government promotes for its lower merchant fees and integration with UPI. The RBI has prevented banks from maintaining exclusive deals with single card networks, forcing more competition and creating opportunities for RuPay’s expansion.
Looking ahead, determination to achieve payments autonomy will remain an enduring challenge for international credit card companies across all three markets. Strategic partnerships with local players will be essential for foreign card giants navigating China, India, and Indonesia’s evolving digital payment landscapes for the foreseeable future.
