The total transaction volume via China's UnionPay system—the only domestic bank card organization in China—amounted to RMB 11.80 trillion or $1.90 trillion in the first quarter of 2015, according to the latest figures released by China UnionPay (CUP).
VISA, the largest payment company worldwide, revealed that its Q1 transactions added up to $1.75 trillion. This marks the first time China's UnionPay exceeds VISA in terms of combined transaction volume and becomes the largest bank card settlement organization.
UnionPay cards can be used in 150 countries and regions with acceptance at over 26 million merchants and 1.8 million ATM units globally. With an issuer base of over 5 billion UnionPay cards globally, CUP has issued its cards to 40 foreign countries and regions.
Although UnionPay has now surpassed Visa, the actual challenge is yet to come. China has opened up its market for domestic bank card clearing services since Jun 1 this year; foreign competitors such as VISA and MasterCard will now have direct access to the market where UnionPay had a monopoly.
China’s UnionPay had realised this at an early stage and therefore it has prepared well. It has been innovating and expanding overseas rapidly, through partnerships and tie-ups with financial institutions.
Let’s take a glance how UnionPay is growing rapidly:
- China’s leading payment service provider UnionPay is partnering with Hong Kong’s ATM operator JETCO to provide a “tap-and-pay” payment service. UnionPay has reportedly bought a 3% stake in JETCO.
- UnionPay’s QuickPass contactless capability will be implemented at ANZ, the first bank in the Australia-Pacific region. ANZ has more than 90,000 ANZ EFTPOS terminals across Australia.
There are a few facts from the Nilson Report that show that UnionPay’s is doing far better than Visa and Mastercard.
UnionPay Debit Cards the Most Popular Global Payment Method in 2014
The report said that in 2014, UnionPay debit cards were the most popular payment method by card type based on purchase volume, followed by Visa debit cards and Visa credit cards. UnionPay credit cards overtook MasterCard credit cards and debit cards followed by American Express credit cards.
Visa and MasterCard purchases accounted for $55 of every $100 in purchase volume last year, compared to $59 in 2013. Visa cards generated $37 of every $100, down from $40. UnionPay cards accounted for $38 of every $100, up from $33 in 2013.
The growth of credit and debit purchase transactions at merchants in 2014 vs. 2013