UnionPay, China's dominant payment service giant, has tried to provide more clarity than its sometimes inscrutable state-owned counterparts, with company president Shi Wenchao shedding light on Beijing’s “One Belt, One Road” initiative. “We can’t survive unless we win trust from people there,” Shi told a forum in Shanghai earlier this week. “It is the people there who can protect our interests.” Since Beijing unveiled its ambitions of creating the Silk Road Economic Belt and the 21st Century Maritime Silk Road last year, all eyes have been on China and how it will splash out billions of dollars on infrastructure to connect some 60 countries along the routes with the world’s most populated market. “It’s a wrong perception that we carry a huge bag of cash to invest in those countries on our own,” Shi said. “Money alone won’t necessarily work under the ‘One Belt, One Road’ initiative.” Shi’s remarks were apparently aimed at soothing concerns about the effectiveness of China’s massive investments in the underdeveloped economies of Central Asia. In the still widely untapped market, UnionPay needs to install thousands of point-of-sales machines as well as settlement and clearing networks before it can offer payment services. UnionPay, already facing challenges from online payment services such as AliPay and TenPay locally, will soon have to take on global giants such as Visa and MasterCard on its home soil when Beijing gives the green light to international companies to conduct yuan-denominated credit-card-clearing business in China. “The ‘One Belt, One Road’ initiative inspired us to create a two-way traffic,” said Cai Jianbo, chief executive of UnionPay International. “By accelerating card issuance in countries such as Kazakhstan and Pakistan, we are cultivating new markets and expanding business as people there use our services.” Government-backed funds and state-owned juggernauts are expected to spearhead the “One Belt, One Road” grand plan. UnionPay was the first powerful institution to unveil a detailed strategy in line with the initiative. “’One Belt, One Road’ will see the number of business travellers soar between China and other countries,” Cai said. “It will be UnionPay’s job to provide payment services.” At the end of last month, UnionPay made its first inroads into Central Asia with an agreement with Kazakhstan’s Halyk Bank and the Kazkommertsbank that will hugely expand the acceptance of UnionPay cards in the sprawling nation. Umut Shayakhmetova, chief executive of Halyk Bank, said 1.1 million UnionPay cards would be issued in Kazakhstan by 2016. At present, UnionPay cards are accepted by 60 per cent of automatic teller machines and 40 per cent of point-of-sales machines in Kazakhstan.
