The world’s largest card pay­ment com­pany…

Finweek English Edition - - IN THE NEWS - BY CIARAN RYAN

UnionPay is the world’s largest card pay­ment com­pany with 4.7bn cards in is­sue and a pres­ence in 150 coun­tries. This makes its card base big­ger than Visa and MasterCard com­bined.

Chances are you may not have heard of UnionPay be­cause the China-based card is­suer is a rel­a­tive new­comer to Africa. It has main­tained a rel­a­tively low-key pres­ence in South Africa un­til now, ser­vic­ing the es­ti­mated 100 000 UnionPay card­hold­ers ei­ther work­ing or re­sid­ing in the coun­try. Plus, there are a fur­ther 14 000 vis­i­tors from China to SA each month, most of whom would be UnionPay card car­ri­ers.

The com­pany first set foot in SA in 2008 when it signed FNB as the f irst lo­cal bank to ac­cept its cards. In 2010, Stan­dard Bank joined the fold. The oth­ers are ex­pected to join soon.

“We are in the happy po­si­tion of hav­ing the banks ap­proach us to part­ner with us,” says Her­man Botes, UnionPay In­ter­na­tional’s re­gional head for busi­ness devel­op­ment.

Why has the com­pany been so lowkey un­til now?

Says Botes: “The ini­tial strat­egy was to roll out the net­work of UnionPay car­dac­cept­ing banks, which has been go­ing very smoothly. This is not some­thing you do overnight. There are for­mi­da­ble tech­ni­cal, com­mer­cial and com­pli­ance ob­sta­cles that have to be over­come, but ob­vi­ously we want to get all SA banks to ac­cept our UnionPay cards and we are do­ing this as fast as we can.

“Since 2008 we have es­tab­lished a pres­ence in 44 African coun­tries, and we have started is­su­ing cards to the re­tail mar­ket in Demo­cratic Repub­lic of Congo and Mau­ri­tius. We plan to start is­su­ing cards in each of the coun­tries where we cur­rently have a pres­ence.” At present, UnionPay card­hold­ers can trans­act at ATMs and point-of-sale (POS) ter­mi­nals. The next step is to al­low card­hold­ers to trans­act on­line, which Botes says should be avail­able by the end of the year.

Now t he f ocus i s on bui l ding UnionPay’s non-Chi­nese card­holder base. As­ton­ish­ingly, UnionPay has built up a card­holder base of 4.7bn, the vast ma­jor­ity of them reck­oned to be in China, with a pop­u­la­tion of 1.4bn. This means the ma­jor­ity of Chi­nese peo­ple have mul­ti­ple UnionPay cards, which al­lows them to take ad­van­tage of spe­cial of­fers and dis­counts made avail­able by dif­fer­ent is­su­ing banks.

Botes ex­plains that UnionPay as a card pay­ment as­so­ci­a­tion does not man­age the re­la­tion­ship be­tween the bank and the card­holder. It is up to the in­di­vid­ual banks to is­sue the cards, and de­liver ser­vice to card­hold­ers in much the same way as lo­cal SA banks will is­sue cards to cus­tomers on be­half of Visa and MasterCard.

With a card­holder base of 4.7bn, this is a tan­ta­lis­ing mar­ket for lo­cal mer­chants, banks and air­lines, most of which ap­pear more than will­ing to join the UnionPay fam­ily.

“This is un­doubt­edly our big­gest at­trac­tion to lo­cal banks and ven­dors, si nce we can of­fer t hem t a rgeted mar­ket­ing cam­paigns at our dif­fer­ent lev­els of card­holder. If you are in­volved in tourism, en­ter­tain­ment or the jew­ellery trade – which is where most Chi­nese vis­i­tors spend their money – you would def­i­nitely want to get in­volved with us as a part­ner,” says Botes.

UnionPay will also be able to of­fer spe­cial deals and dis­counts to African card­hold­ers vis­it­ing the East.

Botes says the at­ti­tude of cen­tral bankers and reg­u­la­tors to UnionPay’s

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