Going to the Beijing Olympics? You'd better carry cash

Visa is pulling out all the stops to promote itself as being inextricably tied with the upcoming Beijing Olympics. However, if you're traveling to China this summer to see the Games in person, you may not be able to use that Visa card as much as you might like.

There's been a huge amount of activity in China surrounding credit cards in the lead up to the first Olympics ever held in that country.

• The size of their credit card market nearly doubled in one year, according to the People’s Bank of China.
• "Beijing, keen to encourage domestic spending and reduce the country's dependence on exports to generate growth, wants 30% of retail sales to be made through credit and debit cards in big cities by next year, from 10% at the end of 2005," according to a June 2008 report in the Asia Times.
• In a blog, Donald Morrison with the International Herald Tribune says, “Official figures indicate that 110,000 Beijing businesses now accept credit cards, twice as many as in 2006” and that “automated teller machines in Beijing are up to 9,400 and counting.” 
• According to ChinaDaily.com, “Bank of China has 430 ATMs in Beijing and plans to set up 290 more for overseas card holders before the Games start. Within the Olympic area, the bank will provide 24 fixed ATMs and over 2,500 POS terminals.”

Much of this growth is directly related to helping make things easier for international visitors during the Games, and it should do just that at Olympic venues and events. However, according to a recent blog in the International Herald Tribune, anyone thinking that they'll be able to use their American Visa card throughout Beijing as easily as they would if they were traveling in Tokyo or London or Hong Kong is just fooling themselves.

According to the Herald-Tribune's Morrison, "In Beijing, more than any other big-country capital, cash is king. Official figures indicate that 110,000 Beijing businesses now accept credit cards, twice as many as in 2006. What those figures don’t show is how many accept only Chinese-issued cards (my guess is about half). And though 110,000 sounds like a large number, there are vastly more establishments that are extremely allergic to plastic of any color.

Morrison also says, "Expect to pay for much of your food, transportation, tips, souvenirs, cheap sportswear at the Silk Market and, in some cases, even lodging in cash. Stacks of it." In addition, he complains of frequently broken ATMs and credit card machines. In other words, just use cash – it’s easier.

It might even be cheaper. Travel site Frommers.com says in its Beijing write-up that credit cards are mostly accepted  “ at those souvenir shops where you are paying well over the odds -- in fact, if a shop accepts foreign credit cards, you might consider looking elsewhere.” Otherwise, you’re setting yourself up to be ripped off. The pre-Olympic growth in credit card acceptance might have changed that some, but it’s still good to be cautious.

While the need to keep cash on hand shouldn't come as too great of a shock to anyone who's traveled abroad, it's interesting when you consider just how much effort Visa spends in promoting its ties with all things Olympic. For example, the company:

• Pledged earlier this year that the 2012 London Olympics would be the first-ever "cashless Olympics."
• Launched a microsite where users can see stories about past and present Olympians and tell their own stories about how the Games have moved them.
• Took over part of the Hong Kong International Airport to promote the Games, including allowing folks to "present their Visa cards to take photos with sporting heroes Liu Xiang and Yao Ming at Visa’s promotional booths."  You can't take pictures with the actual gold-medal-winning hurdler or the NBA star, of course, just life-size images of them.

For all of its efforts, it's unclear just how much of a boost Visa's brand gets through the company's Olympic tie-ins. What is clear, however, is that the Chinese government and Visa -- and all of the other major credit card issuers as well -- still have plenty of work to do when it comes to making Chinese businesses as accepting of plastic as their American counterparts, and tourists should plan accordingly.

UPDATE (07/28/08): Sports Business Journal spoke with Michael Lynch, Visa's head of global partnership marketing, who said that they he expects Visa to maintain its relationship with the Olympic Games, though he said "the numbers will tell."

The site quotes Lynch as saying, "[Visa's] marketing analytics substantiate that the Olympics has been invaluable to our business over the past 22 years."

Later in the article, he says, "We’re in market every day, measuring the effectiveness of the Olympics. Now’s the time we really see the lift. Those that are aware of our Olympic sponsorship feel significantly and statistically better about the Visa brand. And they also claim that they use the Visa card more often because they feel so good about it."

Still, as Lynch said, "the numbers will tell." And in today's economy, it'll be interesting to see just what they say.

See related: Traveling smart with your credit card; Chinese credit card market nearly doubles in a year.