China-backed payment processor to accelerate global expansion
By Samuel Shen and Kazunori Takada
SHANGHAI (Reuters) - China's state-backed electronic payment services giant, China UnionPay, launched an international arm tasked with speeding its expansion overseas, heating up competition with rivals such as Visa Inc (V.N: Quote) and Mastercard Inc (MA.N: Quote).
The move underscores UnionPay's growing global ambitions, and follows a World Trade Organisation (WTO) ruling that China discriminates against foreign card companies by favoring UnionPay in the home market.
UnionPay, China's dominant payment card supplier, is looking to expand the number of shops and outlets overseas that will accept its cards and also grow the number of partner banks issuing UnionPay-branded cards. The move would increase its business, assist inbound and outbound travelers and is also aimed at promoting the use of the yuan as a global currency.
"UnionPay's internationalism provides convenience to Chinese residents and companies going overseas. Also it provides a new payment option for overseas residents and companies," Liu Shiyu, deputy governor of the People's Bank of China, said at the opening ceremony of UnionPay's unit.
Over 70 million Chinese traveled overseas in 2011, up 22 percent from a year earlier, according to government data.
The tie-ups have intensified competition in the international market between UnionPay and global players such as Visa and MasterCard, who have been lobbying China to open its domestic bank card market to foreigners.
The WTO ruled in July that UnionPay had a monopoly on yuan payment cards issued and used in China, but rejected a U.S. claim that the firm was an "across-the-board monopoly supplier" for all transactions denominated in yuan. Continued...