More Infomation about ChinaUnionPay

UnionPay seeks to turn tables on market leaders Visa and MasterCard China UnionPay is set to break the dominance of Visa and MasterCard in the global card issue and payment-processing sector after learning a lesson from the two market leaders.In a rare interview with overseas media, Xu Luode, the president and chief executive of the mainland’s bank card association, told the South China Morning Post that UnionPay would strive to improve its global market share by attracting members to its international business arm with a profit-sharing scheme.“We will share part of our profits with the 74 founding members of UnionPay International, a subsidiary set up at the end of last year,” Xu said. “

In several years, the members hopefully would become our shareholders.” The founding members are credit-card issuers, acquirers and regional card organisations at home and abroad. They advised on UnionPay International’s business strategies and shared profits on the basis of transactions they facilitated for UnionPay, Xu said.The 11-year-old UnionPay started tapping into the world market in 2004. With a presence in 135 countries and regions, it is accepted by 8 million overseas retailers and has issued 15 million cards abroad. But its expansion has been accompanied by discord with rivals including Visa and American Express, which initiated a complaint to the dispute panel on the World Trade Organisation about the limited access to the Chinese market in 2011 and threatened to restrict the use of UnionPay in the United States.
“In profit-sharing, we are learning a lesson from Visa and MasterCard, the oligopolies in the world card market,” Xu said. “They turned harsh with members after they went public, as they pursued the best interests of shareholders. We will not do the same thing.”He said neither the parent nor UnionPay International had any plans for listing. The parent’s cash flows and backup ammunition from founding shareholders would be sufficient to support its investments in technology and infrastructure. “We are often approached by financial institutions and companies for funding. We often disappoint them by saying that would be unnecessary,” he said.Based in Shanghai, the parent company is owned by more than 100 Chinese financial institutions and companies. In 2011, net profit surged 78 per cent from a year earlier to 1.07 billion yuan (HK$1.33 billion), with assets standing at 13.8 billion yuan at the end of the year. China has promised to open the payment-processing sector to foreign players, subject to certain prerequisites, at minimum include two consecutive years of profits. Foreign companies are also not allowed to issue yuan-denominated credit cards independently on the mainland.
The biggest challenge for UnionPay would come from the swift change in payment habits brought by technological advances. This would require increased investments in the online and mobile payment systems to benefit from the e-commerce boom, Xu said.

UnionPay expands global reach to 7m merchants

CHINA UnionPay, the country’s sole bank card transaction firm, said it has established payment networks at more than 7 million overseas merchants.

China UnionPay said the number of domestic merchants that accepts its payment channel was around 3 million. Currently, China UnionPay’s network covers 125 overseas countries and regions where consumers can use debit as well as credit cards to pay at retail shops in major tourist cities.