UnionPay to widen global issue of single-branded cards (2)

It warned merchants to comply with the rules or face penalties, a demand Visa made of all its partners around the world.

But Xu said he believed both companies have a responsibility and obligation to provide overseas transaction services to co-branded cardholders.

"Neither side has the right to unilaterally restrict cardholders' options for overseas payment channels."

In contrast, UnionPay has maintained a sound relationship with MasterCard.

The dispute led to a WTO intervention last year, when a panel rejected the unfounded "monopoly" claims by Visa on UnionPay for processing all domestic renminbi payment card transactions.

But it concluded that China acted inconsistently with its market access commitment in maintaining the company as a monopoly supplier for the clearing of certain types of renminbi-denominated payment card transactions.

To avoid further direct confrontation, it is hoped the expansion of its global network will get UnionPay off the hook.

In November, UnionPay International Co Ltd was launched in Shanghai to beef up the building of the worldwide network.

Xu said the subsidiary company, run on a membership basis, has attracted more than 70 commercial banks, payment service providers and networks to facilitate Chinese nationals who spend overseas.

"It is a two-step solution. First, we try to serve Chinese travelers by offering our channels. Then, we move to the second stage by issuing local currency-denominated cards to local people," he said.