Cards turn for UnionPay, Visa
By Zhang Fengming |
June 4, 2010, Friday
|
Print Edition
Print Edition
TWO credit-card and ATM giants - one from China, the other a global corporate entity - until now have been happily partners sharing in mutual benefits.
However, the relationship has soured and, as in most business disputes, both parties have a different interpretation of the rules.
The companies in question are China UnionPay Co and Visa International.
The Shanghai-based firm said yesterday Visa had no right to ban the use of its co-branded cards at UnionPay outlets overseas. Visa, in turn, said it was operating within long-standing rules.
The row highlights fierce competition between UnionPay and overseas rivals like Visa and MasterCard Worldwide, which are trying to grab a bigger slide of the burgeoning Chinese card market.
"Both companies have responsibilities and obligations to provide overseas transaction services to co-branded dual-currency card holders," UnionPay, China's sole bank-card transaction processor, said yesterday.
"Neither side has the right to unilaterally restrict card holders' options for overseas payment channels."
Visa has reportedly asked its financial member institutions to stop international transactions through the UnionPay system from August 1, or face cash penalties.
Visa said yesterday that operating regulations required that all authorizations for international transactions be processed through its global network, VisaNet.
"This is not a new rule and has been in place for many years," Visa said yesterday. "To this end, Visa regularly reminds its global clients and partners of their obligations to adhere to these rules as well as enforcement actions for non-compliance."
International card companies require a 1-2 percent fee for changing non-greenback overseas currency into United States dollars in overseas purchasing.
UnionPay has waived this fee, making it a selling point for co-branded card holders.
Since 2004, the company has promoted the use of sole UnionPay cards overseas and has penetrated 90 markets by allying with well-known firms, such as Bred in France and RBS WorldPay in the United Kingdom.
However, the relationship has soured and, as in most business disputes, both parties have a different interpretation of the rules.
The companies in question are China UnionPay Co and Visa International.
The Shanghai-based firm said yesterday Visa had no right to ban the use of its co-branded cards at UnionPay outlets overseas. Visa, in turn, said it was operating within long-standing rules.
The row highlights fierce competition between UnionPay and overseas rivals like Visa and MasterCard Worldwide, which are trying to grab a bigger slide of the burgeoning Chinese card market.
"Both companies have responsibilities and obligations to provide overseas transaction services to co-branded dual-currency card holders," UnionPay, China's sole bank-card transaction processor, said yesterday.
"Neither side has the right to unilaterally restrict card holders' options for overseas payment channels."
Visa has reportedly asked its financial member institutions to stop international transactions through the UnionPay system from August 1, or face cash penalties.
Visa said yesterday that operating regulations required that all authorizations for international transactions be processed through its global network, VisaNet.
"This is not a new rule and has been in place for many years," Visa said yesterday. "To this end, Visa regularly reminds its global clients and partners of their obligations to adhere to these rules as well as enforcement actions for non-compliance."
International card companies require a 1-2 percent fee for changing non-greenback overseas currency into United States dollars in overseas purchasing.
UnionPay has waived this fee, making it a selling point for co-branded card holders.
Since 2004, the company has promoted the use of sole UnionPay cards overseas and has penetrated 90 markets by allying with well-known firms, such as Bred in France and RBS WorldPay in the United Kingdom.
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