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Visa International to join China UnionPay
2002/04/27

Visa International, one of the world's leading payment solutions, is considering the purchase of stakes from China UnionPay Co Ltd to share the network resources, said Xiong Anping, chief representative of Visa's Chinese affiliate in Shanghai yesterday.

The China UnionPay Co Ltd, better known as "Yinlian" in Chinese, specialized in creating a new network linking all of the country's lenders.

China UnionPay was owned by 85 financial institutions. The Industrial and Commercial Bank of China, the Bank of China, China Construction Bank, the Agricultural Bank of China and the Communications Bank of China invested 90 million yuan (US$10.8 million) each in the 1.65-billion-yuan venture.

"If all things go smoothly, Visa International will become the 86th shareholder of China Unionpay, " , Xiong said.

Visa needs to share network resources with domestic bankcard issuers, and buying shares from the China Unionpay is its first step, Xiong said.

The number of Chinese people who have traveled overseas ranked the ninth in the world, with the number reaching 12.13 million last year. However, only three percent of Chinese tourists held international bankcards and only 1.74 percent of transactions were covered with bankcards,19 percent less than that of Japan.

It doesn't mean Chinese tourists weren't willing to use bankcards, but the length of time it takes for domestic banks to handle bankcard transactions abroad deterred them, Xiong said.

The overseas spending by Chinese tourists reached US$12 billion last year, and if all the transactions were made through bankcards, domestic banks could have made US$120million of commissions, said Xiong.

Domestic banks will speed up their services soon, Xiong added.

Less foreigners made purchases with bankcards in China, so there is a need for Visa International to join hands with China Unionpay, he said.

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