Farmers’ cooperatives will soon be able to make online transactions and get discounts on their purchases using an electronic prepaid card to be issued by the National Agricultural Holdings Ltd. (01236.HK).
National Agricultural will launch the service in cooperation with China UnionPay in the first half, initially targeting supply and marketing cooperatives in 19 cities in Hebei province, before expanding it nationwide, general manager Rick Cai told reporters in a press briefing Wednesday.
“Cooperatives can get a discount when they use our electronic prepayment account to make purchases,” Cai said, without saying how much.
The service is initially intended to help cooperatives purchase farm inputs such as fertilizers and equipment, but can later be used for other purposes such as payment of consumer goods and school fees.
“This is all part of our goal to upgrade the standard of living in the rural areas,” Cai said.
National Agricultural provides integrated financial and trade services, manages commercial establishments, promotes new agricultural technologies, and helps in the development of rural communities.
Hebei Supply and Marketing Cooperative, a unit of the state-owned All China Federation of Supply and Marketing Cooperatives, holds a majority stake in the company.
National Agricultural has signed an agreement with Union Pay to provide financial services to farmers, including electronic cash withdrawals, value-added services for SIM cards and lottery sales.
“The revenue model of National Agricultural includes splitting transaction fees with UnionPay and interest income from our bank accounts as cooperatives put money in the prepaid account,” Cai said.
China’s supply and marketing cooperatives account for 3 percent of the country’s gross domestic product. There are more than 400,000 agricultural retail stores in China.
In Hebei alone, there are over 16,000 cooperatives. The per capita income in the province is about 3,000 yuan (US$482).
– Contact HKEJ at [email protected]