Visa International, the world's largest payment company, announced a deal yesterday with the operators of China's official bankcard payment network to allow holders of overseas issued credit and debit cards to pay with plastic at stores around the country.
The alliance reflects Visa's motivation to increase its presence in China, which industry insiders said has the potential to become the world's largest travel destination by 2020 up from fifth position last year.
"We estimate that China's forex income from the travel sector will reach US$60 billion by 2008, compared with US$17.8 billion last year," according to Albert Shiung of the Beijing office of Visa International (Asia-Pacific) Ltd.
Under the agreement, Shanghai-based China UnionPay Co. Ltd. will connect all its merchants' point of sales machines on the mainland with Visa's payment system.
Guangzhou and Beijing will be the first two cities with all of their POS machines able to accept all Visa cards, said Shiung, adding that other cities will be added in the near future.
No exact timetable for expansion was released, however.
Currently, less than 50,000 out of the country's 300,000 POS machines accept overseas issued Visa cards.
Since it was founded less than a year ago, China Union Pay has initiated several programs to cultivate a credit consumption environment in the nation.
The company has already signed agreements with MasterCard International and Visa to enable domestic international bankcard holders to withdraw cash and buy goods more easily in other countries by using the two payment companies' vast networks around the world.
A total of 383 million bankcards had been issued on China's mainland by the end of last year with a transaction volume of 8.43 trillion yuan (US$1 trillion).
(eastday.com November 21, 2002)
