Posted On 2014/09/09 By In Business, Economics, News, Shopping With 754 Views

Quiet Rise of China UnionPay

China UnionPay is much less well-known than other major credit card brands, so many people might be surprised to learn that it is now the global leader in plastic, with nearly four billion in circulation, good for a 34-per-cent global market share. It is also the global leader, with over US$5 trillion (Bt160 trillion) in payments, or nearly half of the market, and boasts the world’s second-largest global network in value of transactions after Visa.

Up until recently CUP’s strength was almost entirely based on the huge China market where it has a huge advantage over foreign rivals, as they must use its yuan settlement network. However, now it is making deep inroads into global markets, with growth running at around 30 per cent a year.

Southeast Asia was one of the first markets penetrated by CUP in 2005, only three years after it was launched, and the first CUP card in Thailand was issued in 2009 by Bangkok Bank.

The cards are now widely accepted in all 10 Asean countries and a regional office established in Singapore serves both Southeast and South Asia. CUP is also making inroads into Europe, the US and Africa, and the Russian market is particularly dynamic as banks there are rushing to issue CUP cards in response to the threat of sanctions.

Although Russian banks started issuing CUP cards only this year, within three years they expect to have two million outstanding.

A major driver for CUP’s global spread in the payments industry has been the spectacular growth of Chinese tourism. China is a huge and growing force in the global tourism industry and wherever Chinese travellers go, they like to shop.

There is also a increasing trend for the cards to be issued outside China. Mainly this has been to meet the needs of frequent travellers to China, but the sanctions issue will certainly give a spur to this. There is also rising interest from consumers, as CUP’s fee structure tends to be lower.

CUP is seeking to dominate the next horizon in cards – mobile payments. It introduced some initiatives last year for contactless payments using the NFC system, including alliances with local telecom companies and Chinese mobile phone brands such as Xiaomi.

This year it signed a landmark agreement with Apple for users to make mobile payments using iPhones.

Apple hasn’t yet joined the mobile payments market and its entry is expected to greatly accelerate the use of mobile payments worldwide.

CUP is now the world’s largest card brand, with three out of every 10 cards issued today. This is an extraordinary achievement given that it was launched only 12 years ago. Thai merchants should definitely prepare themselves for the opportunities that lie ahead – such as Chinese and Russian tourists coming to Thailand and wanting to make payments with CUP using their smartphones.


Learn more in our Global Ready China Seminars


Sources:

Article: Nation Multimedia

China UnionPay is much less well-known than other major credit card brands, so many people might be surprised to learn that it is now the global leader in plastic, with nearly four billion in circulation, good for a 34-per-cent global market share. It is also the global leader, with over US$5 trillion (Bt160 trillion) in payments, or nearly half of the market, and boasts the world's second-largest global network in value of transactions after Visa. Up until recently CUP's strength was almost entirely based on the huge China market where it has a huge advantage over foreign rivals, as they must use its yuan settlement network. However, now it is making deep inroads into global markets, with growth running at around 30 per cent a year. Southeast Asia was one of the first markets penetrated by CUP in 2005, only three years after it was launched, and the first CUP card in Thailand was issued in 2009 by Bangkok Bank. The cards are now widely accepted in all 10 Asean countries and a regional office established in Singapore serves both Southeast and South Asia. CUP is also making inroads into Europe, the US and Africa, and the Russian market is particularly dynamic as banks there are rushing to issue CUP cards in response to the threat of sanctions. Although Russian banks started issuing CUP cards only this year, within three years they expect to have two million outstanding. A major driver for CUP's global spread in the payments industry has been the spectacular growth of Chinese tourism. China is a huge and growing force in the global tourism industry and wherever Chinese travellers go, they like to shop. There is also a increasing trend for the cards to be issued outside China. Mainly this has been to meet the needs of frequent travellers to China, but the sanctions issue will certainly give a spur to this. There is also rising interest from consumers, as CUP's fee structure tends to be lower. CUP is seeking to dominate the next horizon in cards - mobile payments. It introduced some initiatives last year for contactless payments using the NFC system, including alliances with local telecom companies and Chinese mobile phone brands such as Xiaomi. This year it signed a landmark agreement with Apple for users to make mobile payments using iPhones. Apple hasn't yet joined the mobile payments market and its entry is expected to greatly accelerate the use of mobile payments worldwide. CUP is now the world's largest card brand, with three out of every 10 cards issued today. This is an extraordinary achievement given that it was launched only 12 years ago. Thai merchants should definitely prepare themselves for the opportunities that lie ahead - such as Chinese and Russian tourists coming to Thailand and wanting to make payments with CUP using their smartphones. Learn more in our Global Ready China Seminars Sources: Article: Nation Multimedia

Readers' Rating

How did you like this article? Would you like to read more content like this? Tell us your opinion: by rating this article you help us select the most relevant content for you in the future. Thank you for pointing us in the right direction.

User Rating: Be the first one !
0

Tags : , , ,

About

Stefan

Stefan (from Austria, Europe) has been living, studying and working in China since 2010. Stefan has worked on several research, publication and consulting projects focusing on the China Travel Market. He holds three Masters degrees and is an expert on China Outbound Tourism, Marketing and Social Media in China. Stefan works with BMG on the Global Ready China Seminars as well as the Global Ready China News and related projects. He also has teaching engagements in the areas of eMarketing and Tourism Strategy.

Leave a Reply

Your email address will not be published. Required fields are marked *