WTO has criticized the government for restricting fair competition and allowing state controlled China UnionPay to carry out renminbi-denominated card transactions.
The government had made it mandatory that domestic currency transactions as well as all payment cards launched in China must imprint ‘China UnionPay’, which is contradictory with WTO rules and not suitable for other foreign card companies including Visa, MasterCard and American Express.
The US has registered a complaint with the WTO in September 2010, alleging over the asymmetry rules in card transactions adopted by the Chinese government and accused it for not allowing foreign firms to participate in the market for electronic payment services denominated in China’s currency, the Yuan.
The US White House press secretary Jay Carney said, "Today’s win highlights that tackling unfair Chinese trade practices has been a priority of this president."
CUP trades in over 110 geographies across the globe and claims to be the third most used card in terms of transaction amount, while Visa and MasterCard operate processing networks that handle transactions for banks that issue their cards.
A recent study highlights that there were more than 2.4 billion credit and debit cards in flow in China at the end of 2010, which represents more than twice as in the US.
