China UnionPay Overview

As the exclusive bankcard association in China, UnionPay operates an inter-bank transaction settlement system through which the connection and switch between banking system and the inter-bank, cross-region and cross-border usages of bankcards issued by associate banks can be realized. Based on the system construction and operation as well as the bankcard network, UnionPay actively collaborates with various industrial parties such as commercial banks to formulate and extend united UnionPay card standards and regulations, create an independent bankcard brand, promote the development and application of bankcards, and maintain an orderly bankcard acceptance market. UnionPay cards are now accepted in more than 160 countries and regions in Asia, Europe, America, Oceania and Africa.

UnionPay strives to promote bankcard–based innovative payment business to meet the increasingly diversified requirements for card use. Cardholders can not only use bankcards at ATMs and merchant POS terminals, but also pay utility bills, book plane tickets and hotels, repay credit cards, and transfer money, among other things, via various emerging channels like Internet, mobile phone, fixed telephone, self-service terminals and digital TV. Under the joint efforts of UnionPay, commercial banks and other related institutions, a bankcard acceptance environment with broader scope is taking shape. It will meet the diversified requirements for card use by the Chinese people.

Since its establishment, UnionPay has actively responded to social and economic development in China and the demand for bankcards with its industrial mission and social responsibilities in mind. UnionPay brings its functions as a bankcard association into full play through cooperation with relevant parties of the bankcard industry to blaze a new trails with Chinese features for the development of China’s bankcard industry. UnionPay works to build a bankcard brand with a well-rounded global reputation and finally achieve a global network.

Construction of Inter-bank Transaction System

1. First generation inter-bank information exchange network

In December 2004, UnionPay launched a national unified inter-bank information exchange network for bank cards with independent intellectual property. The goal of developing the network is to build a powerful information exchange platform with broader coverage, which would eventually evolve into a national inter-bank transaction settlement system for bank cards.


First generation inter-bank information exchange networks connect commercial banks in the association and venders nationwide who can accept UnionPay cards payments. It is an important platform for transaction information processing and the nexus of inter-bank settlement and clearing, as well as an important part of China’s financial infrastructure. UnionPay provides diverse services to its cardholders, including checking account balance, withdrawing cash, depositing, money transfers, payments and other services. It also helps institutions to authorize payments, clear transactions and manage risks. UnionPay also offers customized cards to meet special demands of certain groups of customers such as farmers, soldiers and victims of natural disasters.

Technology Advantages:

The first generation inter-bank information exchange network adopted a centralized processing mode and an open system structure. The system carries technologies with independent intellectual property, including 64 domestic patents, 8 global patents and 2 utility model patents and 3 software copyrights. It is China’s first open platform that can handle massive financial transactions. The system uses a multi-machine architecture and a large number of parametric design methods to ensure good scalability.


The system meets the BS7799 international standard for security management and is capable of 365×24 continuous operations, to ensure information security during bankcard information exchange processes. Currently, the system can process 13,529 transactions per second, which reaches global industry-leading levels.

2. Second generation inter-bank bankcard transaction settlement system

UnionPay started the construction of a second generation inter-bank bank card transaction settlement system, aiming to build a centralized platform with unified operation management, data sharing and flexibility. Compared with the first generation system, the new system exceeded the service scope, flexibility, safety and reliability, while transcending performance.

Technology upgrade

The system extended its service scope from switching and settlement service to comprehensive payment service. It has the architecture characteristics of parameterization and modularization, and can customize service contents according to customer demands. The system architecture of fully redundant design and double-center operation and seamless switch-over will guarantee safe and reliable system operation.

Business Innovation

The second generation inter-bank transaction settlement system supports various payments made through the POS terminal, different bankcards and other innovative methods. It can also work with data and information processing systems to provided customized, value-added services to merchants, cardholders and member institutions. With such services, UnionPay will be able to offer more diversified services other than payment processing and evolve into a more influential service organization with comprehensive services.