1. March 14, 2008
30th Efma Convention:
Leadership in retail finance
13 p.m. & 14 March 2008 - Paris
Xu Luode
President
China UnionPay
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2. March 14, 2008
March 14, 2008
Welcome to
HUAWEI Unionpay Brings Opportunities
China Technologies pp
p y g
to presentation
European Retail Finance Industry
XU Luode, President and CEO of China Unionpay
3. March 14, 2008
Table of Contents
Part I. CUP, growing with China’s economy
Part II. Visions of CUP
Part III
P t III. CUP and E
d European retail fi
t il finance I d t
Industry
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4. March 14, 2008
Part I CUP, growing with China’s economy
1. Development stages of China’s bankcard Industry
2 CUP meeting market needs
2. CUP,
3. CUP’s five major achievements
j
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5. March 14, 2008
Development stages of China’s bankcard Industry
• Cards could not be used in different banks’ terminals or in
different regions
• Inter-bank transactions started in big cities
• Cross-region transactions started in big cities
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6. March 14, 2008
CUP, meeting market needs
• Strong market needs
– To support inter-bank cross-region usage of cards
inter bank, cross region
– To improve the transaction success rate
• The establishment of China Unionpay
– Date：March 26, 2002
– Shareholders：over 70 domestic commercial banks
– Headquarters：Shanghai
q g
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7. March 14, 2008
CUP’s five major achievements
1. Cultivating and developing domestic acceptance market
2.
2 Promoting bankcards with CUP BINs
3. Strengthening cooperation with overseas p
g g p partners
4. Actively promoting the innovation of payment products and
services
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5. Cooperating with domestic banks to educate cardholders
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8. March 14, 2008
Achievement 1 - Cultivating and developing domestic
acceptance market
By the end of 2007,
• 740 000 domestic merchants
740,000
• 1,180,000 domestic POS terminals
• 123,000 domestic ATMs
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9. March 14, 2008
Achievement 2 - Promoting bankcards with CUP BINs
• In 2003, obtained the ISO BINs for CUP cards
• By end of 2007, 530 million cards issued with CUP BINs
2007 BINs,
including 16.5 million credit cards
• In 2007, CUP system switched 4 billion inter-bank transactions,
with a total amount of 438 billion USD.
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10. March 14, 2008
Achievement 3 - Strengthening cooperation with overseas
partners
t
• win-win cooperation with overseas partners
• competitive pricing and effective promotions to Chinese
outbound travelers
• By the end of 2007, CUP’s overseas network include:
– 125 thousand merchants, 174 thousand POS t
th d h t th d terminals
i l
– 366 thousand ATMs
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11. March 14, 2008
CUP network covers 26 countries and regions
• Asia Pacific: Hong Kong, Macau, Singapore, Japan, Korea, Malaysia,
Thailand, Australia, New Z l d etc.
Th il d A t li N Zealand, t
• Europe: France, Germany, Italy, Switzerland, Netherlands, Austria, Spain,
Belgium, Luxemburg
Belgium Luxemburg, Turkey
• North America: the United States
• Africa: Egypt
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12. March 14, 2008
Achievement 4 - Actively promoting the innovation of
payment products and services
• Mobile payment
• Internet payment
• Fixed-line phone p y
p payment
• Inter-bank fund transfer
• Cross-border remittance
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13. March 14, 2008
Achievement 5 - Cooperating with domestic banks to
educate cardholders
cardholders.
• Solution to the strong preference of cash
– Initiated various trainings to promote usage of bankcards
– Enhanced the domestic recognition of bankcard p y
g payment
• Bankcards become a preferable payment tool by urban
Chinese
Chi
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14. March 14, 2008
Part II Visions of CUP
1. China’s golden opportunities
2. CUP s
2 CUP’s five major targets
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15. March 14, 2008
China’s golden opportunities
• Two big events
– Beijing Olympics in 2008
– Shanghai World Expo in 2010
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16. March 14, 2008
Rapid increase of GDP and Foreign Trade
GDP Foreign Trade
g
USD tn USD tn
6 5 4.5
50
5.0
5 4
4
3
3.4 3
3 2.2
2
2
1
1
0 0
2007 2012 2007 2012
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Rapid increase of Retail Consumption and
Inbound/outbound Travelers
Total Retail Consumption Inbound/outbound travelers
USD tn million
2.0 250
2 250
200
1.5 173
1.2
150
1
100
00
0.5
50
0 0
2007 2012 2007 2012
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18. March 14, 2008
CUP’s five major targets
1. To build a more extensive acceptance network both in and
outside China
2. To forge an international bankcard brand with wide influence
3. To set up a large-scale payment technology center
4 T improve service quality i li with i t
4. To i i lit in line ith international standard
ti l t d d
5. To establish a risk control system with advanced technology,
full coverage and effective monitoring
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19. March 14, 2008
Part III CUP and European retail finance industry
1. The increasing trade and tourism between China and EU
2. CUP,
2 CUP a new option to European Retail finance industry
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20. March 14, 2008
The increasing trade and tourism between China and EU
• 2003 - 2007, trade between China and Europe from 162 billion
USD to 448 billion USD, annual growth rate 44%
• In 2006, China’s investment in EU exceeded 2 billion euros.
• Currently, over 30 European countries enjoyed ADS (Approved
Destination Status)
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CUP, a new option to European Retail finance industry
• To further develop acceptance network in Europe
• To encourage Chinese travelers to use CUP cards
• To continuously improve the domestic market
y p
• To provide more efficient and convenient payment services for
European visitors
E i it
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22. March 14, 2008
Common Cause, Same Goal and Mutual Benefit
• To follow China’s steady steps towards the world
• To bring China opportunities to Europe
• To achieve mutual success with European retail finance
p
industry
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