TSYS Acquires Equity Interest In China UnionPay Data

TSYS has purchased an initial 34-percent equity interest in China UnionPay Data Co., Ltd. (“CUP Data”), the payments-processing subsidiary of China UnionPay Co., Ltd. (“CUP”). TSYS will increase its stake to 45 percent, pending final regulatory approval in early 2006.

“We are excited about the establishment of this partnership because TSYS is considered a leader in the world of payments,” says Xinghai Huang, vice president of the international services division from CUP. “We have worked closely toward this objective for several years. We look forward to working with TSYS to continuously strengthen our partnership and to jointly promote the development of the Chinese bankcard industry.”

CUP is sanctioned by the People’s Bank of China, China’s central bank, and has become one of the world’s largest and fastest-growing payments networks. CUP has 166 member banks, and is responsible for operating the only national bankcard network to enable and promote the acceptance of bankcards in China. More than 875 million general purpose bankcards carry the CUP brand.

CUP Data currently provides transaction processing, disaster recovery and other services for banks and bankcard issuers in China. In its first two years of business, CUP Data has signed numerous processing agreements for several of China’s largest financial institutions.

“This relationship brings together the largest bankcard processor in China and the world’s largest credit-card processor. TSYS’ global leadership in the cards industry, combined with CUP Data’s market knowledge and outstanding reputation, creates a partnership that will benefit card issuers with market leading technology and service delivery,” says TSYS President M. Troy Woods. “Jointly we will implement innovative solutions that will make the Chinese cards market one of the most dynamic in the world.”

“TSYS’ ownership in CUP Data fulfills a major objective in TSYS’ international growth strategy in this region,” says Gaylon Jowers Jr., executive vice president of international business for TSYS. “This combination will focus on delivery of leading payments technology and value that issuers require to capture the phenomenal growth in the Chinese payments market.”

China’s rapid economic growth and growing middle class present a tremendous opportunity in the bankcard industry. The bankcard market is large, and growing:

• 875 million general purpose bankcards in 2005, up from less than 1 million in 1993. 200 million credit cards are projected to be in circulation by 2008.
• Bankcard penetration: 0.55 cards per person (vs. 2.9 cards per person in the United States).
• Nationwide retail consumption with bankcards: 5 percent in 2004, up from 2 percent in 2001.
• Bankcard expenditures in metropolitan markets: more than 20 percent.
• Growth rate of card acceptance among merchants: 45.7 percent from 2001 to 2004.