Chinese card issuer UnionPay hit out at Visa on Friday after the US giant told banks to stop using the Chinese firm's system to process overseas transactions on cards bearing both firms' logos.

State media reported that Visa was stepping up enforcement of its rules that ban member banks outside China from using UnionPay channels, under threat of heavy fines.

UnionPay, established in 2002, has been expanding its global network in recent years to grab market share from established rivals such as MasterCard and Visa, which have no access to China's lucrative domestic bank card sector.

According to UnionPay, international transactions handled by its system are exempt from currency conversion fees of between one and two percent, making its cards more attractive to a growing number of Chinese travellers.