China UnionPay

UnionPay is a Chinese financial services corporation that operates a global payment network called UnionPay Network. It was established in 2002 and is now one of the world’s largest payment card issuers, competing with international networks like Visa and Mastercard. In addition to traditional physical cards, UnionPay also offers virtual payment options, mobile payment solutions, and digital wallet services, catering to the growing demand for convenient and secure payment methods in the digital age.

UnionPay has become increasingly popular, particularly in China, where it is the dominant payment network. For that reason, any global payments institution should be aware of UnionPay and be willing to explore membership with UnionPay.

UnionPay Membership

As a member of UnionPay, a financial institution will have established a partnership and affiliation with UnionPay, allowing them to issue UnionPay cards and provide services within the UnionPay network. The process to become a member of the UnionPay network can be time consuming and complex but offer significant financial rewards. The process primarily consists of:

  1. Eligibility Assessment: UnionPay will assess the eligibility of the financial institution based on various factors such as its regulatory compliance, financial stability, business scope, and reputation. UnionPay may require the institution to meet certain criteria, such as having a banking license, adequate capital reserves, and a certain level of business scale. It is exceedingly rare, if not altogether impossible, for an unlicensed financial institution to become a UnionPay member.
  2. Application Submission: Once the financial institution meets the initial eligibility requirements, it can submit an application to UnionPay. The application typically includes detailed information about the institution, its business operations, KYC on its UBOs, officers and directors, financial standing, and any relevant certifications or licenses.
  3. Due Diligence and Review: UnionPay will conduct a thorough due diligence process to evaluate the applicant’s compliance with regulations and industry standards. This may involve reviewing the institution’s financial statements, risk management practices, anti-money laundering procedures, and other relevant documentation.

UnionPay membership also comes with an array of fees not unlike Visa or Mastercard membership. Fees are not standardized and based entirely upon UnionPay’s internal underwriting procedures, which is a departure from Visa/Mastercard. The fees assessed will include:

  1. Membership Fee: Financial institutions are typically required to pay an initial membership fee to become a UnionPay member. The amount of this fee may vary depending on factors such as the institution’s size and the country of operation.
  2. Annual Fee: UnionPay may charge an annual fee to maintain the membership. This fee is usually based on the financial institution’s transaction volume or a fixed amount.
  3. Transaction Fees: Financial institutions may be subject to transaction fees for each UnionPay transaction processed. These fees can vary depending on factors such as the type of transaction (e.g., purchase, cash withdrawal), the location (domestic or international), and the volume of transactions.
  4. Brand Usage Fee: Financial institutions may be required to pay a brand usage fee for the right to use the UnionPay logo and branding on their cards, promotional materials, and other channels.
  5. Technical Integration and Certification Fees: Financial institutions may need to bear the costs associated with integrating UnionPay’s payment infrastructure into their systems. This can include fees for technical support, certification processes, and testing, all of which is provided by a UnionPay-designated provider.


While UnionPay will require members to hold the requisite license in their jurisdiction(s) of operation, UnionPay itself is not licensed – even in China. Rather, as a payment network, UnionPay does not hold financial licenses in countries as it operates primarily as a card scheme and payment network provider. However, UnionPay collaborates with financial institutions that hold the necessary licenses to issue UnionPay cards and provide financial services in various countries.

A card scheme is a mere intermediary between licensed financial institutions. It facilitates the processing and authorization of electronic payment transactions between merchants, cardholders, and financial institutions. It serves as a payment rail that enables the smooth flow of funds and information during the payment process.

The financial institutions partnering with UnionPay, such as banks and financial service providers, are the entities that hold the required licenses and regulatory approvals to operate in specific jurisdictions. These financial institutions work within the regulatory frameworks of their respective countries and comply with local financial regulations and licensing requirements.

Therefore, the countries in which UnionPay holds a financial license would depend on the licenses held by the individual partnering financial institutions in those countries. UnionPay’s network operates through these partnerships, allowing UnionPay cardholders to access financial services and make payments within the regulatory frameworks established by the partnering financial institutions and the respective countries’ financial regulatory authorities.

Alternatives to UnionPay Membership

The most straightforward way to access the UnionPay network without direct membership is to work through an electronic money institution (EMI). The EMI, however, must itself be a member of UnionPay. The primary purpose to obtain UnionPay membership through an EMI is to allow merchants to accept UnionPay network and card payments.

Note however that given the necessity of working through an intermediary EMI, margins on card transactions will be lower versus a direct UnionPay membership.


Given the increasing scope of Chinese P2P payments and remittance, UnionPay can serve as a valuable service offering for financial institutions, as well as merchants.

As always, be sure to reach out to me with any questions or book a meeting here.

About Adam Tracy

Adam Tracy is a payments expert and entrepreneur who specializes in payment systems, blockchain technology, digital currencies, and other emerging technologies. He is the founder of Blockrunner, LLC that provides consulting services to clients in the blockchain, payments and cryptocurrency arenas.

Tracy has been involved in the payments industry as an attorney, consultant and entrepreneur since 2005, while he was become an expert in blockchain and cryptocurrency since its advent in 2013. Tracy has worked with a wide range of clients, including startups, established businesses, and investor – both in the United States and worldwide. He has advised clients on a wide range of compliance, legal and operational issues related to payment transfer systems, crypto token generation and architecture, cryptocurrency exchanges, regulatory licensing, smart contracts, and other blockchain applications.

In addition to his consulting work, Tracy has founded several companies in the payments, blockchain and cryptocurrency space, including a digital asset hedge fund, licensed electronic money institution and a blockchain-based tokenization platform. He is also a proponent of decentralized finance (DeFi) and has been involved in various DeFi projects.

Tracy is also a frequent speaker and writer on blockchain and cryptocurrency topics. He has been featured in a wide range of publications, including Forbes, Hollywood Reporters, CNBC, Reuters, CoinDesk, and Bitcoin.com.

Find Adam: https://linktr.ee/adamtracy

Blockrunner, LLC., is a financial services match-making marketplace and consulting company. We are not a bank, FI/NBFI, Payment Service Provider, deposit taking institution, trust, or money services business of any kind. We are not regulated by any financial regulator. Banking, Payment, Processing, and Licensing services are provided by our participating members. This website is for informational purposes only and does not constitute legal advice. If you need legal advice, please consult a licensed attorney in your jurisdiction.