November 12, 2017
When UnionPay arrived on the scene in 2002, merchants and consumers around the world likely had no idea how explosively it would grow. Moreover, some merchants in North America and other locations are now discovering how essential it is for them to offer this payment option if they want to entice global Chinese travelers.
In fact, UnionPay, which is sometimes simply called U, was developed in the People’s Republic of China with the backing of the government. The company was meant to provide payment processing for four of the main banks in the nation. Now, it is the third largest payment processing organization in the world, coming in just behind Visa and MasterCard.
Chinese travelers tend to prefer having a familiar way to pay. The company’s services were first adopted by retailers of luxury goods. Now, they are accepted by retailers of all descriptions.
Trends show that the company may soon surpass well-known giants Visa and Mastercard. Chinese travelers increasingly are traveling abroad, and they show a preference for familiar payment methods. WeChat Pay and Alipay don’t have the global prominence that their competitor has achieved yet, but merchants who look into their payment processing abilities are likely to benefit.
Marketing material from the company boasts about 80 percent penetration in the United States and Canada. This means that global Chinese travelers are much more likely to find a convenient and familiar way to pay for goods, services, and experiences while exploring North America. ATMs in all 50 states may be used for withdrawals, and about 90 percent of Canadian ATMs permit the use of the card. If more players in the tourism industries in the United States and Canada get on board with offering this option for international travelers, they stand an excellent chance of expanding their customer base.
The appeal of adding UnionPay may grow if the company consents to make its mobile payments available in America. WeChat Pay and Alipay both have mobile payment capabilities in North America. While their main Chinese competitor has unveiled mobile payment options in Canada, they have yet to do so in the United States. Known as QuickPass, it gives consumers the ability to make payments via tapping of cards and with smartphones that are NFC enabled.
While Chinese companies seem to be making headway in other countries, the same cannot be said for world competitors Visa and Mastercard. Both companies have been unable to operate in China. The government is requiring them to form joint ventures with Chinese payment processors if they want to enter the market. Thus far, no progress has been made.
Nonetheless, there is little excuse for merchants in North America to not consider adding U to their range of options for accepting payment. Early adopters were considered forward-thinking, and Chinese travelers were delighted to find a familiar way to pay. Now, those same travelers expect the convenience of a familiar payment method wherever they go. Not providing this option may mean losing out on considerable revenue.