The world’s largest card payment company…
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