The UnionPay systems requirements granted the service suppliers to offer payment services using electronic cards to carry out transactions in foreign currencies. Under this system, the Chinese authority categorically stated that the devices used in payment card processes must conform to the entity systems requirements.
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In addition, it was required that all the cards used in these transactions must bear the UnionPay’s logo. Another bone of contention under this electronic payment system arrangement is that the Chinese merchants were granted some exclusive rights to access the payment cards. However, the other members who were using this system of payment were meant to negotiate before they were given these access rights.
Analysis of the UnionPay case in China
The US dispute on China’s UnionPay case
Under the Unionpay program, the United States of America questioned the legality on the country’s authority to issue credit card for electronic payment services. The US thought this would be a means of encouraging fraud and fraudulent activities regarding the electronic payment systems. Therefore, the US claimed that China was permitted only to use UnionPay for issuing electronic payment transactions that were mainly denominated and done in Chinese renminbi.
The United States’ cause of the rejection of the UnionPay services in China
The US never wanted to accept these UnionPay services because China was flouting the rules governing the electronic payment services. For example, the United States of America argued that China was acting inconsistently with the GATS rules, which regulate such services. The most affected sections of the GATS were the Articles XVI as well as XVII (WHO 1).
Analysis of the main idea for the case
The main idea for the UnionPay case is that it was thought by the United States of America to be contravening the established rules and measures that regulate the electronic payment services. In its defence, the US wanted to see that there was a legalized system that dealt with payment transaction services.
In fact, anything that would contravene the established GATS legal frameworks was not good to be adopted as appropriate means of payment (WHO 4). Therefore, the Chinese authority was found to be contravening the rules governing the electronic payment transactions, and the US could not definitely support such kind of a system.
UnionPay in China and its services
This organization can be regarded as the main bank card company in China, which was established in 2002. Therefore, the UnionPay refers to the banking card that is used by many consumers across the entire country.
In addition, the UnionPay services in China are also important to other foreigners such as the American merchants, owing to its ability to perform interbank transactions by connecting to other ATMs facilities in the county as well as other parts of the world. The UnionPay cards are also famous with the Electronic Funds Transfer at Point of Sale (EFTPOS), thus making it easier for the merchants to carry out payment transactions promptly.
Solution and Conclusion for the case
In sum, there are imminent fears and allegations attributed to the use of the UnionPay systems in China. Therefore, the best solution was found to be a legalized and harmonized framework between the two countries since it was evidenced that there was a legal conflict in the sense that the system operated under the Chinese laws and regulations, which the US thought to be contravening the established GATS rules. This solution would include sound rules and measures on administration and circulation of UnionPay cards.
World Trade Organization (WTO) 2010, China-Certain Measures Affecting Electronic Payment Services. PDF file. Web.