China UnionPay joins chip-card standards body
Updated: 2013-05-21 11:06
By Zhang Yuwei in New York (China Daily)
China UnionPay, the country's leading card-payment processor, has joined UK-based EMV Co, which sets international standards for integrated circuit, or chip, cards.
"UnionPay's addition is in line with the trend of the global payment industry's migration to IC cards, further reinforces the development and implementation of global IC card specification, and develops worldwide UnionPay's acceptance and issuance network," the Chinese company said in announcing the move on Monday.
UnionPay will now have an equal interest in the standards-setting body, along with members including American Express, Japan's JCB, MasterCard and Visa. (EMV is short for Europay, MasterCard and Visa.)
"UnionPay's addition as an equity member of EMV Co further reinforces the growth of the EMV standard globally. Its expertise at a technical, management and implementation level will support our ongoing goal to create a universally consistent and secure infrastructure that supports contact, contactless and mobile chip-based payments into the future," said Joe Cunningham, EMV's executive chairman.
"By joining EMV Co, UnionPay is committing to global interoperability for its branded cards, ensuring they can be used at merchants worldwide," said David Robertson, publisher of the Nilson Report, a payments-industry newsletter.
Standards set by EMV and maintained by its international card-issuer partners ensure that when a "smart card" is used at a point-of-sale terminal or a bank ATM, the information exchange is seamless, Robertson said.
Joining EMV the latest move by UnionPay to expand abroad and become a player in the worldwide payment-card industry. In late April, the Chinese company teamed up with Delaware-based Bancorp Inc to issue its first prepaid bank cards in the United States.
The new card "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 in New York.
As the biggest US issuer of prepaid cards, Bancorp has a sales network of over 550 banks that can offer UnionPay cards to a wide range of clients.
"The more cards that are issued through Bancorp, the more money Bancorp makes," CEO Betsy Cohen said at last month's UnionPay launch event.
The UnionPay travel card issued by Bancorp is aimed at American tourists and businesspeople who travel to Asia frequently. It can be used at more than 90 percent of ATMs, 80 percent of US merchants and in all ATMs and businesses in the Chinese mainland as well as in UnionPay's network elsewhere.
Robertson said that while issuing prepaid cards gives UnionPay a "toehold" in the US, the success of those cards remains to be seen.
"Most people traveling to China from the US are going to be staying at hotels that cater to international tourists and businesspeople. These establishments are already accepting Visa, MasterCard and American Express cards," he said.
"The UnionPay prepaid card would be beneficial to people who will get outside the big cities where Visa, MasterCard and AmEx are not widely accepted," Robertson said.