JADE TERMINALS

CyberNet says it has inked a deal to deploy 30,000 “Jade” payment
terminals in China. The deployment follows a distribution deal with
Reigncom and Eastcom. The “Jade” terminal is powered by a 32bit processor,
has applications developed under “Java,” and is smart card ready.
Deployment in China has begun with the product “JadeSP,” a fast payment
desktop device with sprocket printer, and “JadePOS++,” the EMV upgradeable
desktop terminal. Later this year CyberNet will add “JadeSTAR,” for higher
volume Chinese businesses.

OBERTHUR CARDS

Oberthur Card Systems has been selected by China Unicom to deliver
7.5 million 32k high-end SIM cards by mid-year. The cards will be
manufactured and personalized in Oberthur Card Systems’ ISO 9001 version
2000-certified Shenzhen plant. China Unicom, the second largest wireless
carrier in China, had a total of 64 million subscribers. China Unicom
operates both a GSM and a CDMA network.

SKY PEARL PARTNER

BOC Great Wall International Credit Card is the latest partner in “The Sky
Pearl Club.” “Sky Pearl” is China’s largest frequent flyer program and part
of China Southern Airlines. All “Sky Pearl Club” members who use the BOC
Great Wall International Credit Card can earn points to exchange for “Sky
Pearl Club” miles. Each 16 purchase points earned from credit card
purchases can be exchanged for one “Sky Pearl Club” mile. Available now
through May 31, 2003, “Sky Pearl Club” members can earn 8,000 purchase
points if they apply for a BOC Great Wall International Credit Card and use
the card at least once.

Scotiabank’s Personal and Card Loans Up 13%, as ABM Network Grows by 20%

Citigroup has acquired a 5% interest in Shanghai Pudong Development Bank
and a seat on its board. Citi says the action will enable it to enter the
Chinesse credit card market, with plans to issue a co-branded local
currency card later this year. In March, Citigroup received permission to
carry out foreign currency transactions, enabling it to expand its consumer
operations. Citigroup first launched consumer banking operations in China
in 2001. SPDB is China’s ninth largest commercial bank with 270 branches
and US$30 billion in assets. Reportedly Citigroup paid US$73 million for
its stake in SPDB. Only 20 million consumers carry credit cards in China.

VISA ACCEPTANCE

VISA International has reportedly entered a deal with China UnionPay Co.
to expand the acceptance of foreign issued VISA payments cards at retail
locations throughout China. The Shanghai Daily says the partnership will
initially focus on Guangzhou and Beijing. The newspaper says less than
50,000 of the 300,000 POS terminals in China accept overseas-issued VISA cards.

MONEYGRAM CHINA

Shanghai-based Bank of Communications and MoneyGram International have
signed an agreement that will offer MoneyGram service throughout China.
MoneyGram service will be introduced initially at bank branches in major
cities and then rolled out to other cities step by step. Customers will
soon be able to send funds anywhere in the world through the MoneyGram
network at any of the Bank of Communication’s 2,700 outlets in 86 Chinese
cities and five overseas outlets. Bank of Communications is the first
joint-stock commercial bank in China and is one of that country’s leaders
in the remittance business.

TRAVEL CARD

VISA International launched an “International Travel Card” in
China. VISA says that market research shows only 5% of the 10 million
annual outbound travelers from China own international payment cards. The
study also found more than half of outbound travelers carry over US$1,000
in cash on each trip, VISA prepaid cards may be non-personalized, have an
expiration date, and can exist in the physical or virtual world. They can
be reloadable or disposable. They can be instantly issued. A range of VISA
travel cards now allow consumers to make purchases wherever “Visa Flag” or
“Visa Electron” are accepted and provide 24-hour access to funds in any
local currency.

FDC OPS

First Data Corporation has formed First Data (China) Co., Ltd. The
new operations, administrative office, and data center will be based in
Shanghai. The wholly owned Chinese subsidiary will be fully operational in
the first quarter of 2003. First Data will offer a full range of card and
merchant processing services, in addition to its “VisionPLUS” software, to
card issuing and merchant acquiring companies in China. In China, FDC holds
relationships with several leading financial institutions to provide money
transfer services through its Western Union subsidiary. In addition, the
Industrial & Commercial Bank of China and the Agricultural Bank of China
recently chose to use the “VisionPLUS” transaction processing software
offered by First Data.

IGNITE SMART CARDS

San Diego-based Patriot Scientific has inked a deal with a major
Chinese manufacturer to integrate its “IGNITE” embedded microprocessor
technology into a silicon solution for a smart card product. Last year,
China issued a total of 320.2 million smart cards, among those were 253.3
million memory IC cards and 66.9 million CPU based cards. China’s smart
card industries have formed an industrial chain to accelerate the
development and modernization of finance, telecom, transportation and other
industries. PTSC has successfully integrated the industry’s smallest and
most powerful RISC 32-bit microprocessor. It also has a full Java
application environment.

CARDLINK CONTRACT

Beijing-based China Construction Bank has awarded SchlumbergerSema a multi-million dollar contract for its “CardLinK” licensed systems and integrated services. The project is expected to be completed within the next few months, enabling CCB to launch its international credit card services by the end of this year. SchlumbergerSema says China’s 1.2 billion population and growing Gross Domestic Products of more than US$1 trillion creates a huge card market potential as it currently has less than one million true credit cards in use. The company has over 200 payment systems clients around the world and more than 100 of them are in Asia Pacific. SchlumbergerSema estimates that over 70% of cards in Hong Kong, Malaysia, Singapore, Taiwan and Thailand are processed using its modular solutions, which enable card-issuing/acquiring institutions to begin with basic systems of core modules that grow with their business needs. CCB has more than 20,000 branches across China.

HYPERCOM CONTRACT

China UnionPay has awarded Hypercom a multi-million dollar contract to provide electronic payment networking equipment for China’s largest unified domestic payments network. By the year 2005, Hypercom’s system will allow more than 400 million bank cardholders in 100 cities to use their cards at any payment terminal in China. By the end of this year, Hypercom’s network system will enable cross-city and cross-bank
transactions in 40 major cities. Under the terms of the agreement, Hypercom will initially provide Network Access Controllers and network management systems for 100 of China’s largest markets to build up
the payment network, including Beijing, Shanghai, Guangzhou, Hangzhou and Shenzhen. The Hypercom network equipment will be used to transmit millions of data packets between China UnionPay’s host
computer, banks, and card payment terminals.

CCB ATM DEAL

China Construction Bank has signed a US$12 million ATM deal with Diebold. Under terms of the agreement, Diebold will provide both cash dispensers and ATMs to CCB branches in more than
20 provinces. This order is the second this year to be granted by CCB to Diebold. The first was valued at approximately US$15 million and was announced in July. CCB operates more than 13,000 branches throughout Greater China.