The headline in this article, which is posted in CGTN.com, is not really all that surprising since UnionPay has been pushing acceptance for some time in regions where Chinese business and leisure travelers frequent. Perhaps the interesting take is the ‘prepaid corporate traveler’ target for an initial issuer launch out of the U.K.
“In an interview with the Financial Times, UnionPay’s international market director and Europe head Wei Zhihong said that the bank card provider would work with a UK-based partner to issue “virtual pre-paid cards for British corporate clients” that can be used as mobile wallets while traveling in China and Asia.”
UnionPay has been claiming for some time now that they are the largest issuer of cards globally, surpassing both Mastercard and Visa. As those who follow the Chinese market know, UnionPay has enjoyed what is essentially a monopoly on domestic card processing since its launch in 2003. Back in 2012 the WTO had ruled that China needed to open their market to foreign card schemes, which China agreed to do in 2014. But the rules and process for doing so have been a bit more difficult to figure out. To our knowledge, Visa is the only foreign network to file an application to date, having done so in late 2017. We have no knowledge of the progress of this application, one year later. UnionPay is also under some revenue pressure due to the fast growth of WeChatPay and Alipay as alternatives to card schemes in China.
“UnionPay overtook Visa in 2015 to become the world’s biggest issuer of bank cards in terms of money transacted. 37 percent of the 21.6 trillion US dollars spent globally through bank cards that year went through UnionPay, according to a study by Retail Banking Research.”
In any event, the same has not held true for the corporate card market, which continues to be dominated globally by the other three major brands, so it bears watching as to how this prepaid idea works out.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
