China UnionPay, the country's leading card-payment processor, will soon issue its first prepaid bank cards in the United States through Delaware-based Bancorp Bank, in a bid to push deeper into a huge overseas market.

The new card, to be issued in the coming days, "will give our customers flexibility to use it both in China and the US", UnionPay Chairman Su Ning told China Daily at a launch event for the card on Monday in New York.

Frequent travel by businesspeople, scholars and tourists between the US and China has created the need for more choices in electronic payments, Su said.

He explained that the company is seeking to offer convenient services to American cardholders while improving Chinese customers' payment experiences in the US through partnerships with domestic financial institutions.

The first cards, featuring the UnionPay logo on their face, will be directed mainly at Chinese-American communities across the country.

The UnionPay travel card issued by Bancorp is primarily aimed at American tourists and businesspeople who travel to Asia frequently.

"The fact that it's being targeted predominantly to Chinese communities and will have very little name recognition with the broader US audience to begin with doesn't bode well for mainstream adoption," said John Kiernan, an analyst with CardHub.com, a US website that compares credit cards.

That's not the view of Bancorp, according to CEO Betsy Cohen.

"You have to start from some place where people know you and your brand name," Cohen said at Monday's ceremony. "I think the name UnionPay - although not as prominent as Visa and MasterCard in the US today - will grow in importance, and that's why we formed this partnership."

As the biggest US issuer of prepaid cards, Bancorp has a sales network of over 550 banks that can offer UnionPay cards to a broad range of clients.

"It seems like a natural fit," Kiernan said .

The analyst said the move will help UnionPay "establish itself as a true competitor to Visa and MasterCard in the global payments landscape, and its foray into the US market".

"It will certainly help increase the company's exposure outside of its Asian strongholds," he added. "Not only will UnionPay increase domestic brand recognition and gain a valuable foothold for expanded product offerings in the future, but it will also have a defined presence on both sides of a 2005 partnership with Discover that allows people who travel to China to use their Discover cards at merchants that accept UnionPay, and vice versa."

The new UnionPay card provides payment options for cardholders in the US. It can be used in more than 90 percent of ATMs, 80 percent of US merchants and in all ATMs and businesses in the Chinese mainland as well as on UnionPay's global network elsewhere.

Cohen said Bancorp expects to profit in the long term from its new service as it pushes deeper into the Asian market, where UnionPay is a major player. She said its huge footprint in Asia makes UnionPay a "substantial and important" partner for Bancorp.

"The more cards that are issued through Bancorp, the more money Bancorp makes," the CEO said.

"UnionPay presents us one of the largest opportunities in Asia. It's a way for us to use our knowledge to enter that market," she said.

In the US, transactions conducted using the new UnionPay travel card will be settled in dollars; outside the country, settlements will be in yuan in China or in local currencies in other regions. The underlying dollar-based bank account will be debited without charging currency-conversion fees, the companies said. Also provided free will be counter support at a cardholder's bank and online transactions.

"The prepaid-card market is also poised for significant growth over the next few years," CardHub.com's Kiernan said. "Consumers are expected to load $168 billion onto prepaid cards by 2015, which would mark a 487 percent increase relative to 2009."

"UnionPay is therefore positioning itself to take advantage of this boom," he said.

Su, the company's chairman, sees the US market as a level playing field.

"The US market is one with fair competition. Other card issuers such as Visa and Master Card have carried out business here - we can do the same," he said.

yuweizhang@chinadailyusa.com