First Data Corp. is hoping to capture more international transaction volume from Chinese credit cardholders through an arrangement with the Beijing bank card network China UnionPay.
The venture, announced Monday, promises to sharpen First Data's global rivalry with the card processor Total System Services Inc. of Columbus, Ga., which owns nearly half of the Beijing company's data processing arm, China UnionPay Data Co. Ltd.
First Data announced the launch of a "joint service capability" to enable China UnionPay cardholders to receive cash through its Australian automated teller machine network, Cashcard, which it said is the largest ATM network in Australia.
"We are looking where First Data has certain assets that would be complementary and enabling to the Cup brand," said Pamela H. Patsley, a senior executive vice president of First Data and the president of First Data International.
The arrangement could expand into other regions. China UnionPay is "very intent on making their cards serve their cardholders and have a lot of utility around the world," Ms. Patsley said, so that Chinese cardholders traveling abroad "can use the Cup brand and not resort to a different brand."
She specifically mentioned Europe and the Americas, but would not provide any details or say when to expect further news.
Ms. Patsley acknowledged that the deal essentially enlisted a competitor as a partner, but she said that such arrangements are not uncommon in international business.
"We compete, as First Data International, in China with Cup Data," she said. "But we have a very collaborative relationship with Cup."
The Denver company acquired the electronic payments network Cashcard Australia in 2004. The network now operates a fleet of almost 12,600 ATMs.
TSYS, which is 81% owned by Synovus Financial Corp. of Columbus, did not respond to a request for comment. TSYS bought a 35% equity interest in China UnionPay Data in December 2005 and raised its stake to 44.5% in September.
TSYS also is pursuing its own plans for global expansion. It formed a managed services outsourcing joint venture, TSYS Managed Services EMEA, in November, with Merchants Ltd., a U.K. subsidiary of Dimension Data PLC of Johannesburg.
Dan Schatt, a senior analyst in the retail banking group at the research and consulting firm Celent LLC of Boston, said that First Data is facing some defections in the United States as big clients move their card processing in-house, and needs to find new ways to drive growth, such as international expansion.
"Starting with the largest markets makes a lot of sense," Mr. Schatt said, noting that Beijing is to host the 2008 Summer Olympics.
"There are going to be some competitive headaches there with First Data and TSYS to position themselves for the growth in China," he said. "But the market is so large, there's a possibility for everybody to gain something."
