In the first press conference of China Unionpay (CUP) in 2008, it is showed that the bankcard industry in China is developing in a sound way under the guidance of relevant governmental departments. The continuing amelioration of bankcard acceptance as well as the rapid growth in bankcard transaction volume witness China’s bankcard industry stepping into a new phase of development. China has become one of the nations with greatest speed and potential in developing bankcard industry. In 2007, within borders, 3.98 billion transactions were carried cross-bank through CUP’s bankcard transaction system with a total volume of RMB 3220 billion, which increased by 40.88% and 78.42% respectively. More than 14 million transactions were carried out through the CUP cross-bank transaction settlement system, with a volume of more than RMB10 billion each day.

Increasing growth in the interconnection of CUP cards

By the end of 2007, a scaled bankcard acceptance network has come into being. The number of domestic CUP merchants totaled 740 thousand with 1,180 thousand POS terminals, and ATMs reached 120 thousand, increased by 218 thousand, 363 thousand and 25 thousand respectively over the end of 2006. The rapid extension of bankcard acceptance network owes it to two factors: one is CUP’s increasing resources inclination to areas where bankcard industries started relatively late. CUP has successively launched its operations in areas like Jilin, Inner Mongolia, Shanxi, Tibet, Helongjiang and Guangxi so that the local bankcard industries were boosted effectively. Another factor is the launching of featuring services of bankcard for peasant workers at the end of 2006, which were available, after more than one year’s construction, in 14 provinces like Guizhou, Fujian and Anhui and at more than 36000 basic agencies of Rural Credit Cooperatives.

CUP has cleared its development thought facing the status quo that the bankcard market of China is under unbalanced development. In 2008, CUP aims to achieve the national general use of bankcards to satisfy people’s demands in using bankcards through building the bankcard acceptance network in steps. In other words, the acceptance network will firstly be centered on the key cities, then cover the secondary and tertiary cities and extend to towns and rural areas. By the end of 2008, it’s estimated that the volume of consumption by bankcards will make up 10 percent of the total retail sales of consumption goods in the secondary cities, gaps between cities will be further reduced, and in the mean time, professional services and acceptance terminals that are supportive to bankcard network will be extended to cover the secondary cities and top 100 counties in economic strength nationwide. “It is CUP’s social responsibility to enable the whole society to enjoy the convenience brought by interconnection and general use of bankcard network. We hope that the bankcard acceptance network will, like power grid and communications network, be interconnected and generally used in secondary and tertiary cities, central and western regions and rural area.” expressed Xu Luode, president of CUP, concerning the construction of interconnected bankcard network.

Competitiveness of CUP’s independent brands rises

The year of 2007 witnessed that the issuance of standard CUP cards were increased by 300 million and the usages were enriched as well as the service quality enhanced. CUP, together with commercial banks, continuously subdivided the market, introduced the widely-welcomed Co-Branded Card, Subject Card and Affinity Card, and spread its influence in business card sector. As suggested by AC Nielsen reports, the domestic recognition of CUP brands was as high as 96%, which leads other rivals. Card holders primarily chose CUP cards for application or usage because of its strong appealing power.

New progress is maintained in CUP’s internationalization

Having adopted an international strategy, CUP quickened its step of internationalization since 2004, extending its acceptance network to key countries, regions and merchants where Chinese people frequented and taking active measures to deepen the exploitation. In 2007, CUP opened its acceptance in Egypt, Austria, and Ukraine, making CUP cards accepted in 26 countries and regions across Asian-Pacific region, Europe and America, Australia and Africa. The number of merchants increased by 67 thousand, POS terminals by 89 thousand and ATMs 67 thousand, and totaled 125 thousand, 174 thousand and 365 thousand respectively. The transaction volume rose rapidly.

In the Asian-Pacific market, the acceptance of CUP cards faces an ameliorating environment. In Hong Kong and Macau SAR, CUP cards are almost fully accepted. In Europe, with the increasing coverage of engaged merchants of cooperating institutions and the amelioration of acceptance, CUP cards now has become the first choice domestic card holders made to use overseas. The more encouraging fact is that the oversea institutions start issuing CUP cards. In December 2007, Sumitomo Mitsui Card Company of Japan officially issued the standard CUP credit cards, which has a wide influence on the development of CUP cards. Xu Luode, president of CUP, once expressed that the developing China needs a powerful and independent bankcard industry; a powerful bankcard industry needs to be led by Chinese bankcard practitioners. CUP will build itself an international bankcard brand not only serving China but also more and more countries and regions, following the growth demand of Chinese economy and society as well as economic globalization.

Security of CUP cards enhanced

Safeguarding the industry order together with all sectors in bankcard industry, CUP established and improved the risk prevention mechanism with the cooperation of banks, and set the CUP card anti-fraud system to provide effective information of risk to banks. To strengthen card holders’ awareness of using card safely, CUP also cooperated with relevant units to precaution holders the means of crime such as fraudulence by text message, fishing websites, and mock entrance trap, which notably improved holders’ consciousness of safely using the card and preventing risks. From 2005 to present, CUP has been coordinating with relevant units to jointly crack illegal criminal activities concerning bankcard. According to its own statistics, China is still one of the countries with safest environment for using bankcards and the fraudulence rate of bankcard is much lower than the international average at present.

Achievements are primarily attained in CUP’s new-pattern payment channel

CUP’s operations penetrate into many industries and fields. It continuously gives rise to the innovation of the payment application to provide multi-channel payment choice for the CUP card holders by cooperating with the leading enterprises in fields like insurance, education, medical care and aviation. Card holders can pay off the bill through cell phone, Internet, fixed-line telephone, and STB (set top box), which functions more powerful and appealing. In 2007, the number of users who customize the cell phone payment increased by 4.95 million and totaled more than 10 million with the transaction volume reached over RMB 10.8 billion. The CUP Internet security payment system now links with 10 national banks and 13 regional banks, with transaction volume totaled over RMB 100 billion. The development of fixed-line telephone payment terminal was more rapid, increased by 132.5 thousand and 15 times up compared with the previous year with a total volume of RMB 32.06 billion. With CUP card payment as a selection, the operations of public undertakings payment across the nation, cross-bank remittance through ATMs and cross-border remittance were stretched, making useful attempts to solve problems like public payment and remittance.