Chinese Bank Card Payment processor UnionPay is striving for digital transformation as the country embarks on its 14th Five-Year Plan (2021-2025), said the company’s president.

China’s smart-phone payment users have exceeded 850 million, accounting for 86 per cent of smart-phone owners, and they require a secure payment network. UnionPay’s network now covers 179 countries and regions, and the company has issued more than nine billion bank cards.

UnionPay’s online transactions hit a record high of 1.38 trillion yuan (about 213 billion U.S. dollars) during the Spring Festival holiday, up by 4.8 per cent year on year. Its peak capacity of 240,000 transactions per second provides a stable payment base for activating the domestic market.

“The figure we just saw was 340 billion yuan [about 53 billion U.S. dollars], now it’s 350 billion yuan. This year, we will further our digital transformation on the basis of capacity building and service building required behind the data,” said China UnionPay president Cai Jianbo.

Behind the rapid growth of data is consumers’ increasing demand for payment network ecology and services. Abundant consumption data also paves the way for UnionPay’s digital transformation in 2021.

“We will develop digital products that meet the needs of consumers in the digital payment era through changes in carriers, to provide consumers with a better experience. Generally speaking, we refer to the digitization of payment carriers, the digitization of payment backends, the digitization of payment environments, and the digitization of payment risk control. We will promote the related work of our digital transformation through these kinds of digitizations,” said Cai.

In February this year, UnionPay announced that last February the number of its first digital bankcard exceeded two million holders. The entire process of card issuance, management, and application has been digitized, marking an important step in the process of the bank card industry’s digital transformation.

“Technology is essential. Such as communication technology, big data, and cloud services. These are the foundation of digital transformation. And there is blockchain. We have started to develop some products on the basis of studying blockchain, for example, electronic invoices of blockchain, social security contributions, electronic contracts, etc.

So some serve local governments, some of them are for commercial banks, and some of them are for commercial tenants. Therefore, through the improvement of our own digital transformation abilities, we can enhance our service capabilities and promote the digital transformation of industries such as the service industry,” said Cai.

The most obvious manifestation of the transformation of payment methods is the consumption scene, explained Cai, speaking to a reporter in a supermarket

He believes that supermarkets in China have successfully integrated the three elements of consumption, payment, and digitization. Now the online payment giant is starting to take its business abroad.

UnionPay on Monday announced that it will cooperate with Japan Railway Corporation (JR) to launch online payment services for transport cards. The digital transformation will also bring new payment experiences to more countries and regions.

“We participated in some infrastructure construction in Thailand and Laos. We also have received many invitations from countries and regions along the Belt & Road, hoping we will participate in some tasks related to inclusive finance and the construction of e-government platforms. We will play our technical advantage in China to serve them well.

By serving them well, we can participate in the construction of local financial infrastructure to support our localization business in local areas,” said Cai.

Cai also outlined his predictions regarding the development trends of the payment industry in 2021

“In my opinion, the digital transformation of the payment industry should be realized from several aspects. One is data-driven. Data is definitely the core driving force of digital transformation. The second is to improve the operation mechanism. The third is the adjustment of the business model. The fourth is risk control and management. Finally, we should gradually explore a new business and development model to adapt to the digital age,” he said.

Author: Shi Jing