China UnionPay to offer European credit cards
The world’s biggest card issuer, China UnionPay, has stepped up its European ambitions after striking a deal with a UK back-office startup, Tribe Payments, that will see it offer debit and credit cards in Europe.
The deal makes Tribe one of the first issuer processors in Europe to havew the necessary certification to allow banks to issue UnionPay cards.
UnionPay has talked of its plans to enter the European market for more than six months and is now set to rival Visa and Mastercard with branded cards expected to be available later this month.
The company, founded in 2002, has long enjoyed a near monopoly in China where it comfortably issues more cards, roughly 6bn, than both Visa and Mastercard – both of which have struggled to get the necessary authorisation from Chinese authorities to expand their Chinese presence.
However UnionPay’s domestic dominance has been challenged in recent years by the emergence of digital payment services from Ant Financial’s AliPay and TenCent’s WeChat Pay.
Consequently, UnionPay has looked to expand internationally, most notably across Asia. Its cards are currently accepted at more than 2m ATMs and by more than 41m merchants.
“This agreement shows UnionPay’s intent to compete with the major card schemes in Europe,” said Suresh Vaghjiani, the founder of Tribe. “This is the first time European institutions will be able to put UnionPay cards into the hands of people on the street.”
According to Vaghijiani, there are two unnamed clients looking to issue UnionPay’s cards – one for a virtual card in Europe and another for a debit card in the UK.
UnionPay’s first project in the UK involved the installation of one of its point-of-sale terminals in Harrod’s department store which reportedly led to a surge in business from Chinese students and tourists who were able to buy goods in their own currency and directly from their own Chinese bank accounts.