In 2009, China UnionPay collaborated with various parties in the industry like commercial banks, etc. to effectively overcome the adverse effect of international financial crisis, and promote the bankcard industry in our country to realize rapid and healthy development. Various businesses achieved new leap in terms of performance, while bankcard played an increasingly important role in facilitating payment, serving people’s livelihood, boosting domestic demand and promoting consumption. China has become one of the countries issuing the largest quantity of cards with the rapidest development and greatest potential among bankcard industry worldwide.

Domestic Acceptance Environment for CUP Card Continuously Improved, Inter-bank Transaction Breaking New Record

In 2009, along with the continuous deepening of interoperability for domestic bankcard, CUP acceptance network accelerated its extension to small and middle cities, small and middle merchants as well as vast rural areas. The number of bankcard interoperable merchants, interoperable POS machines and interoperable ATM machines grew up rapidly to reach 1.57 million merchants, 2.41 million units and nearly 200,000 units respectively, increased by 33%, 30% and 28% on a YOY basis. Featured service of bankcard for rural migrant workers has been expanded to nearly 70,000 rural financial outlets nationwide, basically covering all the counties and rural areas below county level in China, with the transaction breaking through ten billion yuan throughout the year, increased by 48% that played an active role in improving the rural financial service environment.

Continuous improvement of bankcard acceptance environment provides increasingly more secure, efficient and convenient payment experience to the cardholders, meets the cardholders’ requirements for card use, raises the enthusiasm for card use and promotes the bankcard transaction to break new record successively. According to the statistical data from China UnionPay, despite of the influence by international financial crisis, the domestic bankcard inter-bank transaction maintained its growing trend in 2009, with the transaction number and transaction amount reaching 6.94 billion and RMB 7.7 trillion respectively, increased by 21.7% and 66.8% respectively on a YOY basis. Bankcard has become the most important non-cash payment tool in China, which plays an increasingly important role in the social and economic life.

Constant Speed-Up of Internationalization Process, the Global Network for CUP Card Taking Shape

In 2009, China UnionPay accelerated in promoting its internationalization strategy, leading to significant expansion for coverage scope of CUP overseas acceptance network and rapid enhancement for international influence of CUP brand. Meanwhile, great breakthroughs have been achieved for construction of CUP overseas acceptance market in a series of key markets. In this year, CUP network pushed forward into the United Kingdom, the United States and Canada, extended to West Asia and Africa, and even penetrated into Taiwan, China to create a milestone for cross-strait financial cooperation. CUP card acceptance business was newly opened in 32 countries and regions throughout the year, and as of the end of 2009, CUP overseas acceptance network has been extended to 83 countries and regions across five continents, covering major regions and important countries worldwide. The rapid expansion of CUP overseas acceptance network promoted substantial growth of CUP card overseas transactions, increased by 62% on a YOY basis.

Along with the continuous increment of CUP card overseas acceptance merchants, POS machines and ATM machines, the acceptance scope is expanded from airports, duty-free shops, tourist attractions, etc. to much broader regions like shopping malls, supermarkets, schools, etc. nearly all ATM machines can accept CUP card in the countries and regions frequently visited by CUP cardholders like the United States, the United Kingdom, Singapore, Thailand, Vietnam, Switzerland, Portugal, Austria, Hong Kong, Macao, etc. Additionally, China UnionPay also actively promotes diversification of its overseas business, while CUP card shopping rebate service, overseas network payment service, etc. launched successively have become the new spotlight for CUP international business in 2009.

Meanwhile, China UnionPay accelerates the internationalization of CUP standards to meet the requirements of overseas cardholders for local payment and cross-border payment, and realize joint market development both home and abroad. At present, financial cooperation institutions from more than 10 overseas countries and regions have issued CUP card in local currencies, while South Korea even breaks through the issuance volume of one million, enabling CUP brand to be recognized by cardholders from increasingly more countries and regions. China UnionPay is rapidly striding forward to the objective of “global network and international brand”.

Significant Enhancement for Competitiveness of Independent Brand, Issuance of CUP Standard Card Newly Added by 420 Million Pieces All Year Around

The year of 2009 has witnessed substantial enhancement of market recognition for CUP standard card, continuous enlargement of issuance scale and significant optimization of issuance quality. CUP standard card is newly added by 420 million pieces all year around. A series of CUP standard card products of era features like Theme Card Celebrating 60^th Anniversary for Foundation of China, Taiwan Tourism Card, Expo Theme Card, etc. have been successively launched and received grand popularity. Issuance of CUP standard official card has reached 3.5 million. Along with the accelerated promotion of financial IC card, the Industrial and Commercial Bank of China and Bank of Communications realized national card issuance while China Construction Bank and China Everbright Bank, etc. realized regional card issuance under the support from China UnionPay. According to the survey by A.C. Nielsen, the internationally authoritative investigation institution, brand awareness of CUP brand is up to 99% nationwide.

Diversification and Individualization of Innovative Payment with CUP card

Innovative payment methods like mobile phone payment, Internet payment, fixed telephone payment, digital TV set-top box payment, etc. based on CUP card have provided more payment options for the cardholders. According to the data from China UnionPay, as of the end of 2009, the total number of mobile phone payment customized users has surpassed 21 million, with the transaction amount and transaction number increased by 56.6% and 20% on a YOY basis all year around; the new-generation smart card mobile phone payment has been tried out in Shanghai, Shandong, Ningbo, Sichuan, Hunan, Shenzhen, etc. to preliminarily build up the application platforms of mobile payment, remote business district and over-the-air download, etc.; more than 100 commercial banks have signed the agreement for joining CUP Internet secure payment platform, among which 44 have completed access with full-year Internet transaction amount increased by 60% on a YOY basis; the number of fixed telephone payment terminal is 600,000 units, with the transaction amount and transaction number increased by 178.6% and 120.3% on a YOY basis all year around; monthly transaction amount of digital TV set-top box payment officially put into commercial use in Xiamen has reached 13 million yuan.

In addition, China UnionPay has established around 20,000 “CUP Standard Card Convenient Service Outlets” in 34 cities like Beijing, Shanghai, Nanjing, etc. to provide payment service covering public utilities payment, credit card repayment, air ticket booking, etc., enabling the cardholders to easily “meet the requirements for daily payment within hundred steps”. Accumulatively 23.92 million transactions have been realized in 2009 with a total amount of RMB 32.8 billion.

From cities to rural areas, from domestic to overseas, from traditional business to innovative payment, from consumption and withdrawal to multi-field application, one large-scale, diversified and popularized CUP card acceptance network is bringing increasingly more payment conveniences to the broad cardholders.

Collaborate with Various Parties in the Industry to Prevent and Contain Bankcard Risks

In 2009, China UnionPay collaborated with various parties in the industry like commercial banks, etc. to constantly enhance bankcard risk prevention and response. The People’s Bank of China, the China Banking Regulatory Commission, the Ministry of Public Security, the State Administration for Trade and Industry, the Supreme People’s Court, the Supreme People’s Procuratorate, etc. successively promulgated policies and regulations like the Notice on Enhancing Bankcard Security Management Prevention and Fighting Against Bankcard Crime and the Explanations on Several Issues Concerning Specific Application of Laws for Handling Criminal Cases Interfering Credit card Management to create a favorable policy and regulatory environment for healthy development of the industry especially for combating and inhibiting the risks of illegal cash out with credit card, etc.

In order to actively implement the relevant policy requirements as well as laws and regulations, China UnionPay collaborates with the commercial banks to further improve the coordination mechanism, rapid response mechanism and long-term management mechanism for risk prevention and response, complete tool system for risk prevention and response, and elevate the linkage and sharing level of risk information. In 2009, China UnionPay established and completed the “five systems and one center” for bankcard risk management like bankcard risk information sharing system, bankcard risk report and management system, bankcard fraud detection system, merchant risk monitoring system, risk management public service platform system and CUP card anti-fraud service center, etc., among which the bankcard risk information sharing system collected nearly 300,000 pieces of various risk information throughout the year, and supported various commercial banks to inquire risk information for 29.53 million times, assisting in detection and investigation of more than 200,000 suspected cash-out transactions throughout the year, and disposing 28,000 illegal cash-out cases. China UnionPay cooperated with the public security and judicial authority to effectively fight against various bankcard illegal crimes, safeguarded security for card use by common people, and effectively guarantee healthy and orderly development of the whole bankcard industry.

Rapid development of bankcard industry greatly support and service for the national economy and people’s livelihood, receiving great attention and concern from the Party and the government. On January 16^th, 2010, General Secretary of the CPC Central Committee, State President and CMC Chairman Hu Jintao made a special trip to visit China UnionPay and praised that CUP card issued by China UnionPay jointly with commercial banks promoted the development of bankcard industry and brought convenience to the mass people in our country, who also said that bankcard industry was a promising industry and China UnionPay shall constantly expand the business fields, improve the service level, accelerate the internationalization process, and strive to establish “CUP” as one major bankcard brand worldwide.

Along with the enhancement of comprehensive national strength in China, it has become increasingly important to create the independent financial brand of global influence; confronted with the current responsibilities for enlarging consumption and domestic demand, adjusting economic structure and maintaining stable and rapid economic development, the bankcard industry shall further play its role in serving development of economic society. President Xu Luode from China UnionPay said that China UnionPay would conscientiously implement the important instruction spirit of General Secretary Hu Jintao, adhere to the CUP development road with Chinese characteristics unswervingly, continuously improve their own credibility, competitiveness and service capability, collaborate with the commercial banks to constantly promote rapid and healthy development of bankcard industry in our country, and strive to establish “CUP” as one major bankcard brand worldwide to provide more quality, secure and efficient payment service to the cardholders and make greater contribution to economic and social development in our country.