China Unionpay to set up Taiwan office early next year.

Taipei, Nov. 5, 2009 (CENS)--China Unionpay Co., Ltd., issuer of China's Unionpay card, plans to set up an office in Taiwan early next year, which, if materialized, will become the first office of Chinese financial institutions on the island.

The plan has been raised only three months after the launch of Unionpay card in Taiwan, underscoring the company's high regard for the island market.

Up to the end of October, the accumulated number of Unionpay-card spending in Taiwan had topped 70,000, totaling NT$700 million in value, or NT$10,000 per spending, according to the National Credit Card Center of the ROC, which until then had been the only acquiring bank for the card in Taiwan.

The spending volume is expected to expand considerably following the acceptance of the card by the merchants of Chinatrust Bank, as the second local acquiring bank for the card, from mid-November. Chinatrust has over 40,000 merchants, including stores in Taipei 101, the outlet of Eslite Bookstore in Xinyi district, and many stores in Alishan and Sun Moon Lake, two indispensible sites on the itinerary of Chinese tourists, which will boost the total number of local merchants for Unionpay card to 120,000.

It, however, is still uncertain whether China Unionpay will apply for the establishment of Taiwanese office with the Financial Supervisory Commission (FSC) or with the Ministry of Economic Affairs (MOEA).

Theoretically, it should apply with FSC, since credit-card companies are listed under the category of "other financial industry," under the General Agreement on Trade in Services (GATS) of the World Trade Organization. Under the scenario, policy revision must be made, since the government has yet to allow Chinese financial institutions to invest on the island.

However, previously VISA and MASTER cards both applied with the MOEA for setting up Taiwanese offices, since they are meant for pure provision of service, rather than care issuance. Later on, some other credit card organizations tendered applications with the FSC for establishing local offices to operate businesses other than pure provision of services. Insiders say that the outcome will depend on the decision of policy makers.

China Unionpay card is a debit card and boasts 1.754 billion effective card holders in China, compared with 220 million for credit cards. Its annual card-spending value reached 478 billion yuan, compared with 167.9 billion of credit cards.

((PL)) (GE)