Got a VISA-UnionPay Card? Look Out for Extra Charges Overseas

Those holding local VISA-UnionPay credit cards beware – according to the Visa International Service Association, local cards stamped with the “VISA” and “UnionPay” symbols will be required to use the VISA network outside China starting from August 1, even when machines are connected to the UnionPay network. What does this mean for card holders? An extra 1-2 percent on all purchases made with your VISA-UnionPay card.

Formerly, if a credit card machine was connected to the UnionPay network, charges were converted directly into RMB. In contrast, VISA converts all amounts to US dollars first, then into RMB, which means two conversion fees plus a VISA processing fee of 1 percent. The impact on small amounts is negligible, but on very large purchases it can considerably increase costs.

The changes will mainly affect travelers in Southeast Asia, where the VISA-UnionPay network is extensive. In contrast, UnionPay connected machines are rare in Europe and the US, so visitors from China have usually had to use the VISA network in those areas anyway.

By March 2009 over 50 million VISA-UnionPay dual currency credit cards had been issued, so the increased charges will have a potential impact on a large number of people.

According to the Wall Street Journal last week the move by VISA is the result of frustration at being locked out of China, where UnionPay has a monopoly on processing credit card transactions. The only way VISA can pressure the Chinese firm is by hitting UnionPay card holders outside the PRC’s borders, where UnionPay relies on cooperation with VISA to allow multi-currency transactions.