UnionPay Chooses Prepaid for First Card Launch in U.S.; Partners with Bancorp and FIS (April 30, 2013)
UnionPay’s recent expansion push has taken a major step forward now that the Shanghai-based payment card network has announced a new prepaid card to be issued by The Bancorp in the U.S. The UnionPay Travel Prepaid Card, announced yesterday in New York City, marks the first UnionPay card of any type available in the U.S. Though specifically targeted at Americans traveling to Asia, the card also can be used in the U.S. wherever UnionPay or Discover is accepted. (Discover acceptance is facilitated by the reciprocal acceptance relationship between the two companies.) The card will be available through Bancorp’s agent bank branch network and will be reloadable at branches or online via electronic transfer, the bank said. FIS, which was instrumental in connecting the parties, is the processor.
UnionPay Travel Prepaid Card transactions are settled in local currencies (dollars in the U.S., for example, and yuan in China), and there are no currency conversion fees.
Through an interpreter, China UnionPay Chairman Su Ning tells Paybefore that his company’s vision is to provide services to cardholders throughout the world. “We’re already in a few dozen markets in Asia-Pacific, but we wish to provide service to consumers in the U.S.—the world’s largest economy.” He adds that China has been successful in growing manufacturing and now it also can be successful in growing financial services.
For UnionPay—already one of the world’s largest payment networks, with more than 3.5 billion credit and debit cards issued—the move to market cards in the U.S. is a major milestone and continues efforts by the state-backed network to make inroads in markets outside China. Along with its 2005 reciprocal acceptance pact with Discover, UnionPay recently made several moves in the U.S. online payments arena. Last December, it was announced that the Discover partnership was being expanded to enable UnionPay cardholders to make online purchases at Discover-accepting Web merchants. In March, UnionPay inked a deal with processor Planet Payment Inc. to enable UnionPay acceptance at online merchants in the U.S. and Canada.
For Bancorp, one of the largest prepaid issuers in the U.S., the deal represents the fruit of a partnership that was first announced last year. Bancorp CEO Betsy Cohen tells Paybefore that Bancorp has a reputation for its innovation, deep thinking and knowledge of prepaid, which made it a logical choice when UnionPay was looking for a U.S. issuing partner. She suggests that UnionPay chose prepaid as its first card launch in the U.S. because prepaid is a comfortable and familiar concept for the Chinese.
Jeremy Kuiper, Bancorp Payments managing director, adds that Bancorp is exploring expanding prepaid relationships globally. “The partnership with UnionPay is another step on this journey.”
UnionPay isn’t limiting its expansion efforts to the U.S. In August 2012, the network partnered with Commercial Bank of Dubai to issue a dual-currency prepaid card in the Gulf Cooperation Council region. And in November 2010, UnionPay and Vietnam’s state-owned Sacombank teamed up on a card acceptance and prepaid agreement in that country. UnionPay also recently launched a prepaid travel-focused card in Japan.
