China has narrowed its gap with international bankcard services in three years.
China, which only has a short history of issuing bankcards, unified its national bankcard networks in 2002 through building a new-brand China Union Pay (CUP), which has narrowed its gap with renowned international bankcard services in three years.
"When China fully opens its financial market at the end of 2006, China's bankcard industry will face heated competition with foreign brands, so the establishment of China's own bankcard brandis really important for the domestic industry to become more competitive," the CUP Board Chairman Liu Tinghuan told the Beijing-based Financial News on Thursday.
The three years following the CUP company's creation on March 26, 2002, have been the key for the development of China's bankcard services, Liu said.
"Facts have proved that the establishment of the CUP as China's own brand laid a solid foundation for the country's bankcard development, and expanded the market for commercial banks through improving financial service qualities," he said.
The Shanghai-based CUP, licensed by the People's Bank of China, is a shareholding financial institution established through capital contributions by more than 80 domestic financial institutions, with registered capital of 1.65 billion yuan (199 million US dollars), according to its website.
Before the establishment of the CUP, Chinese commercial banks issued their own bankcards individually that could not be generally accepted by other banks across the country, which was inconvenient for most consumers using Chinese bankcards.
"By adopting advanced technological tools as well as modern enterprise management mechanisms, CUP aims to establish and run a national bankcard information switch network, so as to realize the interoperability of bankcards nationwide and further the development of China's bankcard industry," CUP's website announced.
After successfully unifying national cross-bank bankcard networks, which allows any cards with a CUP logo to be accepted by most automatic machine tellers, the CUP is trying to polish its brand through expanding its influence in the overseas market.
After the CUP initiated its card services in Hong Kong and Macao Special Administrative Regions in January and September last year respectively, credit and debit cards issued by member banks of the CUP this year became accepted in Singapore, Thailand, and the Republic of Korea for purchases and cash withdrawal.
"This is the first time for bankcards issued by domestic Chinese banks to be used out of Chinese territory in a true sense," said Xu Luode, director-general of Payment Department of the People's Bank of China.
"We will expand our service to more countries, striving to realize a vision of Chinese people touring the world with a single CUP card," Liu said.
"China's bankcard industry must build its own brand. Otherwise, it will be controlled by others," Liu told the Financial News. "Name brand is not only an important symbol of a company's economic strength and market reputation, but more name brands also a symbol of national economic strength and people's quality," Liu quoted Chinese Premier Wen Jiabao as saying.
China is now the country with the biggest potential for bankingcards in the world, said bank experts.