US-based TSYS has purchased an initial 34% equity interest in card payments processor China UnionPay Data. Financial terms of the deal were not disclosed.
TSYS says it will increase its stake in CUP Data to 45%, pending final regulatory approval in early 2006.
CUP Data is the payments processing subsidiary of China UnionPay and currently provides transaction processing, disaster recovery and other services to banks and card issuers across the country.
The company, which is sanctioned by the People's Bank of China, operates the only national card network in the country and has 166 member banks.
Gaylon Jowers, executive vice president of international business for TSYS, says the equity stake in CUP Data is part of TSYS' international growth strategy in the region.
"This combination will focus on delivery of leading payments technology and value that issuers require to capture the phenomenal growth in the Chinese payments market," adds Jowers.
TSYS says there are 875 million general purpose bank cards currently in circulation in China, up from less than one million in 1993, and is expected to rise to 200 million cards by 2008.