Table of Contents
1 Industry Overview: Key Factors Shaping Third-Party Payments in China.................1
1.1 Continued preference for cash payments, but bank card payments rising......................... 1
1.2 Credit card use remains low; debit cards widespread...................................................... 2
1.3 Limited coverage of non-cash payment services............................................................. 3
1.4 China UnionPay’s bank card monopoly........................................................................... 4
1.5 Quasi-online payment systems an interim solution ......................................................... 4
1.6 Two ISPs, 162 million Internet users ............................................................................. 4
1.7 Two mobile operators, 500 million subscribers ............................................................... 5
1.8 Contactless smartcard use increasing but largely limited to buses and subways................ 6
1.9 Government regulations and the “national interest”........................................................ 7
2 China UnionPay: The Gateway to China's Payment Industry ....................................9
2.1 Ownership, management team, investors ...................................................................... 9
2.1.1 Major subsidiaries................................................................................................ 10
2.2 Business Performance, Revenue Model, Users.............................................................. 12
2.3 Services and coverage ............................................................................................... 14
2.4 Markets and channels ................................................................................................ 15
2.5 Marketing and branding ............................................................................................. 17
2.6 Partners .................................................................................................................... 18
2.7 Users figures and profile ............................................................................................ 20
2.8 Competitive analysis: strengths and weaknesses.......................................................... 22
2.9 Outlook..................................................................................................................... 23

List of Figures
Figure 1: Credit cards issued in China and in the US (M).......................................................... 3
Figure 2: Internet Users in China, 2001-2006 ......................................................................... 5
Figure 3: Mobile Subscribers in China, 2002-2010F (M) ........................................................... 6
Figure 4: China government groups involved in third-party payment regulation......................... 8
Figure 5: Shanghai CardInfo's telephone payment terminal.................................................... 11
Figure 6: Merchant fees for CUP partners ............................................................................. 13
Figure 7: Comparison of merchant and user fees for other payment models in China............... 13
Figure 8: China tier-1 city data, 2005 ................................................................................... 15
Figure 9: Countries where CUP is accepted........................................................................... 16
Figure 10: CUP-Visa market comparison ............................................................................... 17
Figure 11: CUP inter-bank and payment network partners ..................................................... 18
Figure 12: CUP technology partners ..................................................................................... 19
Figure 13: Total debit cards issued in China, 2005-1H2007 (M) .............................................. 20
Figure 14: Total CUP credit cards issued in China, 2005-1H2007 (M) ...................................... 21
Figure 15: CUP acceptance (POS and merchants) in China, 2004-1H2007 ('000s).................... 21
Figure 16: CUP ATM network in China, 2004-1H2007 ............................................................ 22
China Third-Party Payment Profiles: China UnionPay
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