Union Pay International (UPI) saw revenues fall 14% to $177m in 2021, according to documents filed with UK Companies House, as travel restrictions kept Chinese travellers at home. This represents almost half the levels seen in 2019, before the pandemic disrupted Chinese tourism and business travel.
Despite the difficult circumstances, UPI has continued to invest in expanding its acceptance network around the world, including in Europe. In 2021, selling and distribution expenses more than doubled to $66m, though other costs were tightly controlled, with total operating expenses falling 8% to $257m. As a result, operating losses narrowed slightly to $71m from $80m in 2020.
UPI is the world’s largest card scheme, owned by a consortium of Chinese banks and mainly issued to Chinese nationals residing in China. However, the brand is increasingly positioning itself as a viable alternative to Visa and Mastercard, with an extensive acceptance network worldwide and a claimed 80% acceptance coverage in Europe.
UPI now has a total of 200m cards issued outside China, with 70% of these in Belt and Road markets. Issuance progress in Europe has been slow, with just two deals announced in 2022 – the Postal Savings Bank of Serbia and Banka Bajna Luka in Bosnia.
It remains unclear when mainstream European financial institutions may be willing to partner with Union Pay, as long as geopolitical concerns remain unresolved.