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Retail News Asia: UnionPay now in Thailand
2016-03-30


While the company’s success up to now has relied on the huge domestic home market in China – which accounts for 99 per cent of all UP credit cards issued – this could be about to change. UnionPay is setting its sights on global expansion and intriguingly Thailand is the catalyst which will help make this happen. Over the past few years several landmark decisions about ATM/debit cards have been made by the Bank of Thailand (BOT) and the Thai Bankers’ Association (TBA), and these are beginning to be implemented this year.

To combat the growing incidence of ATM and debit-card fraud, the BOT decided that all new ATM/debit cards in Thailand must carry secure embedded chips, a mandate which comes into force this May. Significantly, the BOT and TBA adopted UnionPay’s chip technology as the standard for all of Thailand’s debit cards, the first country outside of China to do so.

This will mean a mass transformation of Thailand’s 50-million strong debit-card market, as currently few debit cards have embedded chips and they are mainly used as ATM cards and not for retail transactions. Most cards will, therefore, need to be replaced and to support this UnionPay has joined with Bangkok Bank to establish the Thai Payment Network (TPN). Other leading Thai banks are also expected to become shareholders in this joint venture company.

Thai banks and other financial service providers will produce the new cards under the TPN and TPN-UnionPay brands, which will be locally issued and processed in line with BOT policy.

China UnionPay chairman Ge Huayong said that the launch of TPN in Thailand has great significance and he cited four major reasons for this. It is a new breakthrough in the development of technical standards in China’s financial sector, it represents a model for China’s policy of Going Global, it lays a solid foundation for large-scale acceptance and issuance of UnionPay cards in other local markets, and it will help UnionPay develop a business-expansion model which can be replicated which will accelerate the roll-out of its global business.

Ge Huayong also added that it ties in with China’s “One Belt, One Road” international expansion strategy as UP plans to develop similar payment infrastructure in other countries along the Belt and Road.

Meanwhile, in another major development China UnionPay last month signed a memorandum of understanding with Visa to collaborate on payments security, innovation and financial inclusion.

Visa CEO Charlie Scharf said the two card giants would work together to develop innovations in digital payments and broaden the access of financial services to a wider population.

All these developments fit well with the Thai government’s digital payments strategy and should ensure that Thailand is at the forefront of using new technology in the payments industry.

The benefits include helping our businesses keep up-to-date with modern technology while ensuring the public has easy and convenient access to financial services.

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