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Visa bans banks using China’s UnionPay

Visa Inc. said on Thursday it is introducing a ban on banks using China UnionPay Co.’s network to process international transactions with credit cards bearing the Visa and UnionPay symbols.

UnionPay has been giving cardholders favourable exchange rates on certain currencies. The move is likely to mainly affect Chinese cardholders travelling overseas, but does not affect transactions inside China – either by Chinese or foreign cardholders. Nevertheless, it could be a sign of Visa’s dissatisfaction  with the limits on its operations in China.

The decision comes at a time when international credit-card companies are feeling increasingly frustrated with their limited access to the lucrative Chinese market, where UnionPay has a monopoly on processing card payments.