George Harrison of the Beatles wrote about Bangladesh in 1971, when starvation and natural disasters devastated the population. Today, the country is experiencing exciting developments in payments, including expansion of the UnionPay model, which now looks more like the Mastercard or Visa franchise model than the domestic payment scheme.
First to George:
- Bangla Desh, Bangla Desh
- Where so many people are dying fast
- And it sure looks like a mess
- I’ve never seen such distress
- Now won’t you lend your hand
- Try to understand
- Relieve the people of Bangla Desh
The Economy Turned Around Ten Years Ago
There have been some notable changes in the country, as the World Economic Forum points out in a recent piece titled The Secret to Bangladesh’s Economic Success:
The ADB ranked Bangladesh as the fastest-growing economy in the Asia-Pacific region, eclipsing China, Vietnam and India.
Propelled by a robust manufacturing sector and an enormous boom in infrastructure, Bangladesh has set a target of becoming a developed nation by 2041 to coincide with the platinum jubilee of its independence.
Take the electricity crisis for example.
These days, however, we produce more electricity than we need at night and are close to eradicating any forms of power shortages once and for all.
While in power, Sheikh Hasina has opened up many sectors traditionally reserved for the public sector to the private sector, including health, banking, higher education, TV and even export processing and economic zones.
Credit Cards are Hot
PaymentsJournal noted recent developments by Visa, which is entering the market with QR Codes. In that article, we noted:
The country has a labor force of 67 million, drawn from a population of 160 million with a 4.4% unemployment rate. With 25% of the population below the poverty line, and a per capita income of only $4,200, the CIA Factbook indicates that the country experiences high levels of poverty. But, with 92% of the country using mobile devices, there is the promise for long term development.
But the news today is about a second top local credit card issuing bank in this sparsely carded nation, issuing UnionPay cards. China Economic Net reports that UnionPay has a second banking issuer in Bangladesh.
Chinese Ambassador Li said the launch of UnionPay credit card by EBL in collaboration with UnionPay International marks another milestone in the progress of financial cooperation between China and Bangladesh.
UnionPay is one of the most widely accepted payment network around the world, with card acceptance in over 174 countries and regions, he said.
The successful issuance of UnionPay credit card will surely facilitate international transactions and open up new business opportunities, he added.
Li said China and Bangladesh are growing ever closer in economic and trade cooperation in recent years. “In 2018, our bilateral trade reached 18.7 billion U.S. dollars, up by 16.8 percent over 2017.”
In November last year, Mutual Trust Bank (MTB) joined hands with UnionPay International to jointly launch debit and credit cards alongside QR code payment, e-wallet and digital card services for the first time in Bangladesh.
For UnionPay, Bangladesh rounds out its global roll-out. According to a recent press release, the Chinese credit card network is now available in 176 countries and regions. With UnionPay’s bank issuing model:
UnionPay started its global business in 2004.
According to UPI, UnionPay is now accepted by over 28 million merchants across the globe.
In Asia, UnionPay payment is available in about 90% of the merchants; UnionPay cards can be used in 90% of countries and regions in Europe.
Meanwhile, some 90% of merchants in the US and Australia now accept payments with UnionPay credit cards.
Statistics from UPI also reveal a growing acceptance rate in emerging travel destinations such as Russia, where the overall acceptance rate of UnionPay card will reach 100% within the year; 80% of merchants in Africa accept UnionPay payments.
Since then, UnionPay has stepped up efforts in making card issuance a local business in the global market. In 11 years, the number of cards issued surpassed 50 million. However, after that, it only took three years of UPI to double that number. Now the total number of UnionPay cards in 57 overseas countries and regions has surpassed 120 million.
Three takeaways in today’s read: Economies can turnaround, as did Bangladesh. Card networks waste no time integrating into new markets. Finally, keep an eye on UnionPay as it does its global expansion. It is looking more like the Mastercard/Visa four party model than the insulated China Union Pay offering ten years ago.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group
