A credit to the global banking system
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E-mail China Daily, March 18, 2013
Zhou Kang relied solely on his Chinese UnionPay card to meet all bills during a seven-day trip to South Korea over the Spring Festival last month.
"Wherever I went I saw the logo for UnionPay and cashiers always asked me if I wanted to settle bills using it," said Zhou, 35.
From $700 for cosmetics to $2 for a coffee, transactions were smooth and it saved him a lot of time and the cost of converting Chinese cash into a foreign currency. Zhou also received a 6 percent discount at Lotte Mart, which was holding a UnionPay card holder's special offer during the festival.
Zhou was among hundreds of thousands of China UnionPay card holders who traveled abroad during the Spring Festival, helping to boost the overseas transactions of the bank card by 33 percent year-on-year, according to its own statistics.
In Cambodia, Thailand, South Korea, Malaysia, Singapore, Europe, the Middle East and the United States, UnionPay posted a more than 40 percent growth in business.
UnionPay is the only Chinese bank card organization in the Chinese mainland. Founded in March 2002 it operates under the approval of the People's Bank of China, or the central bank. Its headquarters are in Shanghai and it has about 400 Chinese and overseas associate members.
According to its website, UnionPay cards are accepted in 143 countries and regions outside the Chinese mainland. Sixty-five institutions in 17 overseas countries and regions have issued UnionPay cards.
The United States, South Korea, Iceland, Hungary and Japan permit UnionPay credit card transactions via holders' signatures.
The 130 million credit cards issued by UnionPay in the mainland and abroad were used in transactions during this Spring Festival to a value of 15 times that during last year's festival.
Expanding services
Zhang Wen, a 29-year-old PhD student in the United Kingdom, said in the past three years she has seen a fast expansion of the UnionPay network in both UK and other countries in Europe.
"When I first arrived here I used only foreign-currency cards because there were not many shops, department stores or supermarkets that accepted UnionPay cards. It took quite a lot of energy every year to settle my tuition fees, accommodation and travel expenses, transferring cash from my yuan account to my sterling account here in Scotland," she said.
However, that gradually changed. "It started with some hotels and department stores in London such as Harrods and Selfridges. Then an increasing number of places I visited often, such as shops around Covent Garden and China Town in London, started to accept UnionPay cards."
Over the past 10 years, UnionPay, the only Chinese bank card scheme to operate along the same lines as its well-established international counterparts, has gained widespread acceptance in 36 countries and regions in Europe, according to Yang Shengliang, an official with China UnionPay's Paris office.
"My experience is that in France and Italy an increasing number of shops, especially luxury brands, craft stores and small restaurants, are accepting UnionPay cards," said Chen Hao, a 26-year-old sales representative for a machinery manufacturer who travels frequently in Europe.
The benefits of using a UnionPay card lie in the zero charge for currency conversion fees, special offers for card holders and convenient withdrawal of money from ATMs, said Chen.
Chen said he regards the UnionPay card as a "useful tool for saving money in big cities and outlets".
Special offers during China's traditional festivals are especially welcomed by customers, said Simon Willemsen, a shop assistant at Designer Outlet Roermond in the Netherlands.
"At many stores we offered a 10 percent discount during the Spring Festival to celebrate the beginning of the Year of the Snake. We put appropriate decorations all over the outlets and there were signs to attract customers, many of which were awesome," said Willemsen.
Sun Deheng, an engineer undertaking an internship in the Netherlands said he spent more than $1,000 on branded products at the shop on gifts for his girlfriend and parents.
"It's a bargain shopping here and, with the UnionPay card logo everywhere, it feels like shopping in a mall at home, he said.
In Bloomingdale's in the United Arab Emirates, 43-year-old Song Jin from Beijing collected vouchers valued at 300 dirham ($81) as a benefit for UnionPay card holders who spent at least 3,000 dirham on Feb 14. Song spent the voucher on a bracelet as a Valentine's Day gift for his wife.
"I did not expect there would be so many offers for UnionPay card holders. It seems the card service is really expanding its influence," said Song.
Global trade
UnionPay enjoys close to 100 percent recognition in Chinese households, according to researcher ACNielsen. Its subsidiary, UnionPay International Co, which launched in December 2012, is dedicated to operations in overseas markets to accelerate the brand's integration into the global financial market, said Su Ning, board chairman of China UnionPay and UnionPay International
More than 60 commercial banks from the Chinese mainland and other economies had become members of UnionPay International by the beginning of March.
Liu Shiyu, deputy chief of the central bank, said he hoped UnionPay International would become a widely recognized, mainstream brand in the global payment market.
In the first half of 2012, 42.7 percent of social retail goods were paid for using bank cards in China. A growing number of Chinese enterprises and individuals were using China UnionPay cards for cross-border settlements, accelerating the internationalization of the yuan, said Liu.
China UnionPay has already set up an extensive network in China. UnionPay International will help extend its business in overseas markets, said Liu.
"The launching of UnionPay International will help boost Shanghai's presence in the global financial market," said Tu Guangshao, vice-mayor of Shanghai.
Shanghai is striving to become an international hub for the innovation, trading, pricing and clearing of yuan products by 2015. UnionPay International is expected to play a role in efforts toward that goal, said Tu.
Mobile payment
China UnionPay set up its headquarters in Shanghai in 2002. The launching of UnionPay International is expected to attract more resources to Shanghai to help the city become an international financial center, said Tu.
China UnionPay currently has a share of more than 20 percent in the global payment market in term of business volume and is among one of the top three payment card brands in the world, according to the ACNielsen report.
To expand its market share, China UnionPay's recent efforts to develop more channels are reaching into mobile payment, including Near Field Communication technology-backed payment methods, in which transactions can be conducted by swiping a cellphone across a screen.
On Feb 23, China Mobile, the world's largest mobile network operator, and China UnionPay announced they had completed integration of their Near Field Communication "trusted service manager" platforms.
According to statistics from the Ministry of Industry and Information Technology, China now has more than 1 billion mobile phone subscribers, from which will emerge a large market for mobile payment enabled by integration of bank cards and mobile phones.
China UnionPay is working with France's Gemalto to build a secure mobile Near Field Communication ecosystem that will make mobile phones safe carriers for the billing of transactions.
"It's a natural way forward to develop mobile payment in a society with a huge demand for time-saving transaction without the need to key in a PIN or give a signature," said Wu Chaohua, a 26-year-old Shanghai programmer who said he will buy the "mobile phone wallet" service as soon as it is launched in China.
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