Visa International is on course for a showdown with China UnionPay after telling bank members not to use its rival's network to process international transactions for their co-branded cards.
According to local media reports, Visa is threatening to fine banks that use UnionPay's system for international transactions after 1 August, affecting Chinese card holders travelling overseas. Banks that violate the rule face an initial $50,000 fine and subsequently $25,000 a month.
Visa's move comes as UnionPay looks to expand its international presence while continuing to enjoy a monopoly in China. Recently Visa and others players approached the US government about filing a WTO trade complaint against China for cutting them out of the $723 billion market.
China UnionPay told local press that Visa has no right to introduce the ban but the American firm says the ban is designed to reinforce existing rules and protect cardholders' interests.