Daily Management Review

China UnionPay goes to Europe


09/18/2018


Chinese payment giant China UnionPay decided to begin expansion into the EU market. In October, the company will start issuing bank cards in the UK, and by the end of the year it will also enter the markets of other European countries. This decision was UnionPay’s response to growing competition in the home market, where it has to confront growing digital payment services.



Richard Bao via flickr
Richard Bao via flickr
The China payment system China UnionPay, already in the first place in the world for issuing bank cards, is preparing to start issuing cards in the UK. As the British newspaper Financial Times writes, this could be the first step in the expansion of the Chinese company in Europe and intensification of competition with Visa and MasterCard. Already in October, UnionPay will issue virtual prepaid cards for corporate clients, and employees of British companies will be able to use these cards when traveling to Asia. In December the company is going to start issuing cards in other European countries. "In Europe, our target audience is local customers in their home market, not just people who go to Asia," said UnionPay head of the European Union Wei Zhihong. Mr. Wei explained that the company does not need to obtain a license for activities in Europe, since the cards will be issued by local banks, and transactions on them will go through companies engaged in processing payments.

In China, UnionPay is essentially a monopolist in issuing cards; the company has issued about 6 billion cards in its home market, that is, more than Visa and MasterCard combined. Already now, UnionPay cards are accepted in 41 million stores and 2 million ATMs in 170 countries of the world - in Europe, for example, about 60% of merchants accept these cards, which is not least due to the growing number of Chinese tourists in the region. At the same time, UnionPay's decision to enter the European market, among other things, reflects an increase in competition in the Chinese market itself, where companies have to withstand the onslaught of digital payment systems such as Alipay and WeChat Pay. Recall that they are increasingly hampering it in the field of electronic payments. In recent years, UnionPay has already begun international expansion, though, while it was mainly about other Asian countries, for example, in Japan and Myanmar. UnionPay already has offices in Paris, London, Madrid, Milan, Frankfurt and Budapest, soon the office will also open in Stockholm.

source: reuters.com






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