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UnionPay aims to get foothold in European market

By Cecily Liu | China Daily | Updated: 2018-09-17 23:49
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A man takes a photo in front of UnionPay logos. [Photo/IC]

Chinese bankcard association China UnionPay has announced that it will partner with a British-based bank to launch a UK card, targeting British customers who are frequent visitors to China.

The new card can be used anywhere in the United Kingdom, and across the 170 countries and regions where UnionPay has a presence. Card issuance and payment processing will be done by the bank, while UnionPay takes a fee commission for each transaction. UnionPay expects this UK card to be launched later this year, although it says the UK bank partner is still confidential.

UnionPay's UK expansion signifies its ambition to rival Visa and Mastercard for global business. This development also came at a time when UnionPay is losing payment commissions to China's rapidly growing mobile payment players Alipay and WeChat Pay.

Luckily, UnionPay has already built up a certain level of reputation in the UK and across Europe, as more and more retailers have started accepting UnionPay cards to attract high-spending Chinese outbound tourists who do not have Visa or Mastercard.

Now UnionPay is rolling out its services to local clients in Europe. "We want to target local customers in the (European) domestic market, not only people travelling to Asia," said Wei Zhihong, head of UnionPay in Europe.

If the UK move proves successful, next year UnionPay will also issue cards across Europe in partnership with European banks.

Effectively, holders of such a UK-issued UnionPay card can use their card for all normal transactions in the UK, just like any other British local card. But when they travel overseas, for example to China, they can use this card across the country in all places that accept UnionPay, which is essentially anywhere that accepts card payment.

"This card would prove very helpful for frequent China travelers, and those who frequently purchase products from China through e-commerce," said Alan Barrell, entrepreneur in residence at the Judge Business School at the University of Cambridge.

"However, UnionPay needs to implement an effective marketing strategy in order to promote this new product, because many people still have not heard of it," Barrell said.

UnionPay was founded in Beijing in 2002, as an association for bank cards in China. UnionPay card numbers quickly grew, and by 2016 the number of new cards issued by UnionPay comprised 54.9 percent of the global total, which is more than Mastercard and Visa. In the same year, 15 percent of global card transactions were made using UnionPay cards.

However, UnionPay's growth is mainly confined to the Chinese market. Its international market penetration is still significantly lacking, as less than two percent of UnionPay cards in use are issued outside China. Those UnionPay cards issued outside of China are mainly in Asian countries, such as Thailand.

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