NEW YORK — Discover Financial Services has joined with Chinese bank China UnionPay to provide debit card services to as many as 800 million China UnionPay cardholders for visits to the U.S., a first for Chinese tourists, who typically use cash in U.S. retail stores.
The partnership was announced here on Monday at Macy’s 34th Street flagship. China UnionPay executives made the first ceremonial purchase — a men’s gold-striped DKNY tie — with a China UnionPay debit card on the Discover PULSE network, which consists of point-of-sale terminals at 3.2 million merchants and 250,000 automated teller machines in all 50 states.
“We expect the number of people traveling from China to the U.S. and spending money at merchants to dramatically increase over the coming years, and this will give them a tool” to easily buy merchandise at retail stores, said David Nelms, chairman and chief executive officer of Discover Financial Services, in an interview. “All of these transactions will go across our network and the retailers are able to — without doing anything differently — just simply sell the merchandise and get paid.”
About 350,000 Chinese tourists have visited the U.S. in 2005, the fastest growing tourist group to the U.S., according to the Travel Industry Association of America. They spend an average of $2,400 each.
China UnionPay, which is licensed by the People’s Bank of China, is a shareholding financial institution based in Shanghai. It was established via capital contributions of more than 80 Chinese financial institutions and was officially incorporated in 2002, according to its Web site.
Further extending the partnership to U.S. citizens, Discover PULSE network cards will also be accepted next year at China UnionPay ATMs and POS terminals in China, Nelms said.