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UnionPay, the mainland’s dominant bank card clearing business, is now focused squarely on expanding its overseas presence, after having its domestic monopoly broken up by the government.
Cai Jianbo, who heads UnionPay International — which controls its businesses outside the mainland — said he regards the opening up of the domestic clearing market as a a massive opportunity for the company.
It has actually inspired the home-bred champion, he added, to quicken its expansion plans outside of China.
Cai told South China Morning Post the country is now a world leader in the use of mobile payment services, and those technologies and experience will be used by UnionPay to woo more foreign customers.
“Foreign markets have unlimited potential,” he said.
“We aim to launch new, innovative and user-friendly payment services in several overseas markets.”
The government first announced in 2014 that it was allowing foreign companies such as Mastercard and Visa to move in on the Chinese domestic market.
UnionPay had until then been the sole clearing service provider for yuan-denominated card payments in the domestic market.
That status as the sole provider ended last month.
Cai said UnionPay’s QuickPass payment service, for example — which allows users to simply wave a smartphone above a point-of-sale unit with no cash or bank cards, or even a telecoms signal to complete a transaction — made its debut in South Korea at the end of last month, becoming the first overseas market to adopt the technology.
“UnionPay feels confident of promoting QuickPass and our other new mobile payment services to foreign markets, given the mainland’s fast growth in the segment,” he said.
“We have to highlight safety and convenience as the key elements in the process of exploring foreign markets.”
Analysts have predicted it will take some time for foreign players to make any significant impact on the domestic Chinese market, but despite that, UnionPay has been putting its best foot forward in internationalising its businesses outside the mainland, said Cai.
To date, the Chinese company has issued 60 million bank cards in 40 countries and regions with nearly one trillion yuan (HK$1.16 trillion) of transactions now being conducted annually.
Foreign transactions now account for 40 per cent of total revenue at UnionPay International, including the use of UnionPay cards by mainland tourists, students, and business people overseas.
Domestically, UnionPay’s network processes around 55 trillion yuan of transactions yearly from 5.5 billion cards in circulation.
Cai said the company is focused on increasing its client base abroad, especially as China’s economic profile continues to grow internationally.
“There has been mixed reaction to Chinese spending habit overseas, in countries like Japan — but use of UnionPay cards here by foreigners is also valued at dozens of billions of yuan,” he said.
“That [side of the business] is by no means piecemeal.”
UnionPay will soon launch its QuickPass services in Hong Kong and several other Southeast Asian countries, Cai added.
The payment giant is also competing against China’s internet giants such as Alibaba, owner of the South China Morning Post, and Tencent, whose mobile wallet services are widely used by mainlanders.
Cai said the increasing penetration of mobile technologies into people’s everyday lives had prompted UnionPay to innovate its businesses and fine-tune its marketing strategies.
In a latest move, UnionPay International and its partners, including Bank of China and China Merchants Bank, inaugurated a cross-border marketing platform to make the most of the latest technologies, while offering services and discounts to card holders via mobile gadgets.
(SOUTH CHINA MORNING POST)
