Caixin on November 5th (Reporter Guo Zishuo), one of the three major domestic bank clearing institutions, Universal Connectivity Information Technology (Beijing) Co., Ltd. (referred to as 'Universal Connectivity'), announced yesterday the start of upgrading and migration of existing Mastercard branded bank cards. This is also the first major move since Universal Connectivity opened for business half a year ago.

Universal Connectivity stated in the announcement that it will cooperate with various domestic partner banks to carry out the upgrade and migration of existing cards to new 'China Mastercard' bank cards and other receiving products. As for existing cards, Universal Connectivity explained that they are limited to use overseas single-brand Mastercard bank cards, or dual-brand bank cards 'Mastercard + UnionPay'.

According to the announcement, cardholders of existing cards can continue to use them normally until the expiration date. However, the issuing bank will actively communicate with cardholders to recommend replacing them with corresponding receiving products. Cardholders can enjoy the payment convenience and related benefits of the receiving products earlier.

After the expiration of existing cards, the issuing bank will issue corresponding receiving products based on cardholders' choices. For some single-brand Mastercard credit card products limited to overseas use, before being replaced with the new 'China Mastercard' bank card products, cardholders can activate the domestic transaction function by actively confirming, with specific activation methods subject to the issuing bank's announcement.

Regarding the timetable for the upgrading and migration of existing bank cards, a person in charge of Universal Connectivity responded to Caixin reporters: 'Issuing banks of existing cards will take different measures and timetable based on actual business. Specific details are subject to the subsequent announcements or notices from the issuing banks.' The aforementioned Universal Connectivity representative stated that they will fully cooperate with issuing banks to advance the migration and upgrade of Mastercard branded existing bank cards, while continuously expanding the online and offline all-channel acceptance network with partner institutions to create richer card benefits.

Universal Connectivity is the third domestic institution to obtain a bank card clearing business license, jointly established by Mastercard and NetsUnion Clearing Corporation in China. In November 2023, the People's Bank of China issued a bank card clearing business license to Universal Connectivity. In May of this year, Universal Connectivity officially opened for business, becoming the main entity operating Mastercard branded bank card business in China, authorizing partner banks to issue new 'China Mastercard' bank card products for domestic and overseas use, and in coordination with partner institutions to continuously expand the online and offline all-channel acceptance network. Since opening, Universal Connectivity has cooperated with more than ten banks to launch 'China Mastercard' bank card products.

In fact, before Universal Connectivity announced the upgrade of existing cards in this round, there had been previous examples of adjustments to dual-brand card businesses in the industry. In January 2023, CM Bank Credit Card Center issued a notice that due to American Express Company's business strategy adjustment, the bank would stop accepting and issuing applications for American Express Gold and Green Cards starting from March 1 of the same year. American Express Gold and Green Cards are dual-tag cards of AE (American Express) and UnionPay.

Regarding the upgrade of the current inventory cards by the Mastercard network, Broadcom consulting financial industry analyst Wang Pengbo analyzed to Caixin reporters: 'From a security perspective, it is not ruled out that some inventory cards may still be magnetic stripe cards. After the inventory cards are upgraded to chip cards, the security level will also increase.'

'Not only that, domestically issued dual-interface cards were a temporary measure when the bank card market had not been fully opened up. Currently, as a licensed card organization in China, the Mastercard network's upgrade and migration of existing bank cards has resolved historical legacy issues.' Wang Pengbo added that against the backdrop of a saturated credit card market, the Mastercard network's upgrade and migration of existing bank cards with partner banks is conducive to optimizing the existing product line, deeply exploring existing users, attracting and retaining customers, expanding the domestic usage scenarios of Mastercard, and promoting the transformation of credit card inventory operations. This is also an industry trend.