Liu Tinghua (second from right), chairman of China Unionpay, holds up a China Unionpay bank card on Monday and the tie he bought with it at Macy's in New York. The transaction marked the first-ever acceptance of a China Unionpay bankcard in the US. [Reuters]

During a ceremony this morning at the famous Macy's Herald Square in New York City, Liu purchased a golden necktie with a China UnionPay (CUP) bank card. The transaction marked the beginning of acceptance of China UnionPay cards on the Discover's PULSE network.

This was the first phase resulting from a strategic agreement between China UnionPay, China's only national bank card payment network, and Discover Financial Services LLC, a business unit of Morgan Stanley and the owner of the Discover Network and the PULSE ATM/debit network.

PULSE is one of the leading ATM/debit networks in the US.

"The acceptance of CUP cards in the US is a starting point from which both parties will complement each other and develop together in concert to raise the strategic cooperation to a new level," said Wan Jianhua, president and CEO of China UnionPay, at the ceremony.

David Nelms, Chairman and CEO of Discover Financial Services, said the strategic alliance between CUP and Discover would expand the links between the growing Chinese consumer economy and the US market.

"It will create new opportunities for merchants, financial institutions and other ATM owners by enabling them to serve Chinese travelers ? the fastest-growing segment of the US tourism market," he said.

There are estimated 360,000 Chinese visitors to the US in 2005, according to the US Department of Commerce, with an average amount spent of 2,413 US dollars. The annual growth in Chinese travelers to the US is estimated at around 11 percent for the next 3 years.

According to the long-term agreement signed by CUP and Discover in May 2005, after the acceptance of CUP cards on the PULSE network throughout the US, the next step will be to complete arrangements for Discover Network cards to be accepted at CUP's network of more than 365,000 merchant locations and 80,000 ATMs in China.

David Nelms told Xinhua during an interview that he expected to go to China in the middle of next year, and make a similar transaction at a ceremony there, with Discover cards using in CUP networks to mark the beginning of next phase of the cooperation between the two companies.

"We look forward to next year, when we expect Discover Network cardholders will be able to use their cards at CUP locations throughout China," he said.

Discover Financial Services LLC operates the Discover Card with more than 50 million card members, the Discover Network with more than 4 million merchant and cash access locations and the PULSE ATM/debit network which serves more than 4,100 financial institutions and includes more than 3.2 million merchant terminals and 250,000 ATMs.

China UnionPay Co. Ltd. is the only national bank card payment network in China, with more than 800 million bank cards issued on the CUP network. Both companies are continuing to work toward the acceptance of CUP cards at Discover Network's more than 4 million merchant and cash access locations in North America.