Before November, members of China’s largest cardholder group who relied on their home bank accounts didn’t have too many options when making purchases in Canada.
“If you were a visitor or a student living here, you would go to an ATM, and withdrawal cash and go make a purchase if you didn’t have some other credit card,” said Jeff Guthrie, chief sales and relationship officer at Toronto-based Moneris Solutions.
Earlier this month, Moneris became the first Canadian credit and debit processor to accept cards issued by China’s UnionPay.
Guthrie said the focus immediately went to Vancouver when the two companies began discussions.
“We worked with (UnionPay) hand and glove to figure out what were the key markets,” he said, adding the Chinese cardholder group provided data about where members would go to shop and what kinds of products they were drawn to.
“Clearly the big demand is going to be on the West Coast…no question, Vancouver is the gateway.”
The number of mainland tourists visiting Canada has been on the rise in recent years, pushing demand for easier access to money when making purchases.
About 34,000 Chinese tourists visited in December 2013, according to Statistics Canada. That’s up from 29,500 in December 2012 and 27,000 in December 2011.
Moneris is focusing much of its efforts on signing up merchants in Vancouver, followed by Toronto, and then Calgary and Edmonton.
Most of the “hundreds of merchants" that have signed up for the service are small businesses with a large mainland Chinese client base, according to Guthrie.
But he said deals are in the works for larger retailers, too.
UnionPay members won’t have to pay any fees to use their cards at participating merchants. Instead, Moneris is making money by negotiating a fee with businesses accepting UnionPay cards.
Furthermore, participating merchants are required to display the UnionPay logo on the storefront to let cardholders know they can shop at that location.
“There are going to be those merchants who initially just have a huge concentration of Chinese customers who have UnionPay and it won’t take long through word of mouth or through them promoting it for acceptance to grow in those locations,” Guthrie said, adding he expects most of the rapid growth will be concentrated in Vancouver.
Meanwhile, UnionPay will use its network in China to inform cardholders their cards are now accepted in Canada.
“They will actually make a point of promoting these merchants in Vancouver,” Guthrie said.