China’s Fight with Visa and MasterCard Goes Global
Commenting on UnionPay’s oversea expansion, Simon Lee told Financial Times that “this is an effort to expand China’s financial influence globally. The recognition of Chinese brands, especially in finance, is very low abroad. Companies like this [UnionPay] are trying to change that.”
In just 15 years, UnionPay has become the largest bank card group in the world by value of transactions, taking a 37 percent chunk of the US$21.6tn global payments market in 2015, according to a report from London-based payments consultant RBR.
UnionPay’s payment terminals are now ubiquitous and more than 41m merchants in 160 countries accept the cards, the company says, making it one of the most widely accepted payment providers. However, the group’s grip on the market is based almost entirely on China, where its status as a de facto monopoly has drawn the country into a years-long clash with the World Trade Organization. Excluding its business in China, UnionPay claims just 0.5 per cent of the global market, compared with Visa’s 50 per cent and MasterCard’s 31 per cent.
In a span of just five years, the group says more than 68m UnionPay cards have been issued in 40 foreign countries, including advanced economies such as Singapore and Japan. In Russia, UnionPay is tipped to link up directly with the country’s payments system as the authorities seek ways to reduce the impact of possible future western sanctions.
Experts watching the group say it has a clear government mandate to take on Visa and MasterCard outside China. Commenting on UnionPay’s oversea expansion, Simon Lee, Assistant Dean (Undergraduate Studies) and Senior Lecturer of School of Accountancy at The Chinese University of Hong Kong Business School said in an interview with Financial Times that “this is an effort to expand China’s financial influence globally. The recognition of Chinese brands, especially in finance, is very low abroad. Companies like this [UnionPay] are trying to change that.”… Read More [PDF]
This story was also translated into Chinese (PDF) and published in the Financial Times Chinese website.
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Source: Financial Times
Date published: 24 April, 2017 / 25 April, 2017 (print edition)
Photo: PYMNTS