China UnionPay (CUP), China's only debit and credit card payment handling network, has issued an official response to plans by Visa to penalize acquiring banks who use CUP's network for overseas transactions through dual-currency cards bearing both companies' logos.

"No party has the right to limit cardholders' choice of overseas payment network," a CUP media relations officer who asked not to be named told the Global Times Thursday.

He added that both parties are obliged to provide overseas services for double-currency cards.

Visa confirmed last week that banks outside of the Chinese mainland that process transactions from the cards through CUP's system rather than Visa's will be fined $50,000 by the company for the first transaction. They will be $25,000 per month for the following transactions, it said.

Visa charges cardholders 1.5 percent of the total transaction amount if the local transaction currency is not US dollars, while CUP waives the charges.

Currently, all debit and credit cards issued on the Chinese mainland are required to bear the CUP logo.

"I am worried that if Visa does implement such restrictions, I will have to pay extra fees on currency conversion from yuan to US dollars and then to Hong Kong dollars when I use Visa's settlement channel," said Liu Ying, a Hangzhou office worker who flies to Hong Kong to shop every few months.

"All products of Visa should be managed and protected according to Visa's operational rules, which is the reason why a Visa card should be processed at Visa's network," read a statement from Visa, reported by the National Business Daily Thursday.

An officer surnamed Xu at a Shanghai-based credit card center told the Global Times that during a transaction, all three parties, namely the acquiring bank that accepts the payment, the card payment network and the credit card issuer, will charge merchants a transaction fee.

He added that this is the main source of revenue for card payment organizations, such as Visa, MasterCard and CUP.

Zhang Huiming, head of the Enterprises Research Institute and professor at the School of Economics at Fudan University, told the Global Times that the dispute between Visa and CUP shows that domestic enterprises still lack the commercial acumen to deal with international rivals.

"The current status of CUP is kind of embarrassing. The company should refer to its original contract with Visa," Zhang said.

"If there is no specific term regarding rights over overseas transactions, it shows CUP lacked business awareness when signing the contract."