ANZ BANK has signed a tentative agreement with China UnionPay, one of the world's largest payments system operators, allowing its customers to tap into UnionPay's extensive networks in the Asia-Pacific.
However, the Asia-focused bank is playing a catch-up game against its big four rivals in allowing UnionPay cardholders - nearly all of China's bank customers and a key source of tourism revenue - to access its ATM and merchant network in Australia.
NAB and Commonwealth banks both have agreements with UnionPay. NAB has been leveraging its relationship with UnionPay as a point of difference to its competitors. As reported by BusinessDay last year, key entertainment and shopping destinations have switched their transactional banking services to NAB to gain access to UnionPay cardholders.
ANZ's chief executive for Australia, Phil Chronican, said the partnership with UnionPay would "make it easier for our customers to make payments as they travel and conduct business through the region".
He also indicated the new agreement would provide a boost to its retailer customers in China as they engage in more trade, tourism and migration businesses with Australia.
Chinese tourists are visiting Australia in record numbers and China has become its most important growth market. Tourism Australia aims to double the number of Chinese visitors to Australia by 2020.
They are also some of the biggest spenders, and an average transaction on UnionPay cards in Australia is about $800, compared with $120 to $130 on Visa or MasterCard, according to UnionPay data.
Victoria's China Tourism Strategy, an initiative by the state government, has identified the accessibility of financial transaction facilities for Chinese visitors as one of its objectives.
BusinessDay understands that banks need to invest considerable resource to upgrade their systems in order to accept UnionPay cards. That is one of the reasons ANZ has been slow in sealing a deal with the Chinese payments operator, says a source close to the bank.
China UnionPay is the third-largest bankcard issuer in the world after Visa and MasterCard. It is majority-owned by the big four state-owned Chinese banks.