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How China UnionPay Took on Giants MasterCard and Visa

UnionPay has emerged as the world's fastest growing bank card association, but not without some initial controversy.

UnionPay's History of Growth

UnionPay, formerly China UnionPay, is the descendant of a 1993 project called the "Golden Card Project" which set out to create a unified Chinese bank card network. The card brand was officially launched on March 26, 2002 in Shanghai by PBOC governor Dai Xianglong. The Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China and the China Construction Bank were its first members.

"By creating UnionPay, Chinese authorities would have a powerful tool in which they could influence the market significantly," says Tristan Hugo-Webb, Associate Director of Mercator Advisory Group's Global Payments Advisory Service. "Other reasons for creating UnionPay are decreased reliance on the international card networks and greater control over future initiatives like financial inclusion."

With the newly established organisation in place, all denominated transactions were to be cleared using UnionPay's network. This had prompted the U.S. to request trade consultations with the WTO. Even though the Bank of China had issued MasterCard and Visa-branded cards, they were required to partner with UnionPay as they were unable to process domestic transactions themselves, build their own networks or issue their own cards. As a result, when MasterCard or Visa bank cards were issued, they were co-branded with UnionPay.

In 2015, a ruling by the State Council, the country’s chief administrative body, proclaimed that China’s clearing market was to be opened up to foreign competition, raising expectations for the prospects of foreign card companies in China. For the time being, however, UnionPay dominates the Chinese market and is opening up an insurmountable lead.

UnionPay Today

Today, UnionPay cards are accepted by over 36 million merchants including more than 10 million who are based online. UnionPay’s secure cross-border payment services are used by the world’s largest cardholder base, amongst the fastest growing globally. 40 countries and regions outside the Chinese Mainland have issued UnionPay cards and over 6 billion UnionPay cards have been issued globally.

China’s Ecommerce Market

China is the world’s largest and fastest-growing eCommerce market, nearly 80% larger than the United States. Online merchants that accept UnionPay have access to millions of potential new clients. In fact, over 250 million UnionPay cardholders have purchased online or using their mobile devices in the past year alone.

With Chinese consumers embracing cross border eCommerce more each year, the growth of UnionPay does not seem to be slowing down. ECommerce merchants seeking to expand their sales into the lucrative Chinese online marketplace would do well to accept UnionPay cards, creating a frictionless shopping experience for their customers.


Rod R. Katzfey

Rod R Katzfey, Senior Vice President, International Acquiring, began his career in banking prior to moving into the merchant services arena. Initially hired as a street-level commission sales rep in June 1996 for FDMS, Rod saw quick success in sales and quickly began to mentor other sales reps and take on management roles. This success has led to growth in his 25+ Years in the Electronic Payments Industry; International and US Domestic Processing, Banking, Payment Gateway & Gift Cards (Open, Closed Loop and Network). Rod is continuously working on ways to differentiate the organizations he represents while also being known for his “out of the box” thinking and approach to challenges.