|By Business Wire||
|September 14, 2012 04:50 AM EDT||
A financial IC card refers to a bankcard using a chip as its storage medium. Chip cards are capacious enough to store information such as keys, digital certificates and fingerprints. They work in a similar way to microcomputers, capable of processing multiple functions simultaneously so that the card holders can achieve multiple purposes with one card. Compared with magnetic stripe cards, chip cards are safer and more powerful. There is a noticeable trend that magnetic stripe cards are bound to be replaced by financial IC cards.
On March 15th, 2011, the People's Bank of China (PBOC) issued the Opinions on Promoting Application of Financial IC Cards, which proposed a timetable for facilitating the acceptance of financial IC cards and the financial IC card issuing of commercial banks to issue. Pursuant to the timetable, all nationwide commercial banks shall start issuing financial IC cards from January 1st, 2013; and in better developed regions and major partnering industries, commercial banks shall exclusively issue financial IC cards for RMB settlement starting January 1st, 2015.
The issuing volume of financial IC cards is seeing an explosive growth in China. A total of 14.156 million financial IC cards were issued in 2011, up 151.3% year-on-year. The Industrial and Commercial Bank of China (ICBC) alone issued 10.907 million last year.
Figure 1 Market Size of Financial IC Card in China, 2009-2015
Source: CCID Consulting, March 2012
The financial IC card market presents the following features:
Industry applications are in full flourish. China's major commercial banks have actively developed industry applications of financial IC cards by integrating them with transportation, tourism, shopping, healthcare and the Olympic Games uses. ICBC has issued the Peony Sinopec Fleet Card, the Peony Parks on Credit Card, the Guangshen Railway Peony Financial IC Card and the Peony Shopping Credit Card; the Agricultural Bank of China (ABC) has issued the Zhangjiajie Tourism Card; and the China Construction Bank (CCB) has issued the Long Transportation Card. According to the statistics of CCID Consulting, more than 40 kinds of financial IC cards had been issued by China’s major banks by 2011.
The industrial consolidation is rather high. Judging from the brand structure of China's financial IC card market in 2011, the industry is highly consolidated: Wuhan Tianyu and Jimalto are the two dominant IC card manufacturers, while other manufacturers such as HengBao, GoldPac and Eastcom Peace only occupy a very small share in the market. The current situation is unfavorable for the sound development of the industry. According to CCID Consulting, with the surge of the issuing volume of financial IC cards, the industrial concentration will decrease gradually and newcomers may obtain more opportunities.
The chip market needs further development. China's chip market for financial IC cards is basically dominated by NXP and Infineon, which presents challenges as well as an unexplored "blue ocean" for domestic chip enterprises. Chips for financial IC cards are the most high-tech and profitable part of the industry chain. At present, Datang Microelectronics has launched chip products for financial IC cards in mass production, and other domestic chip manufacturers are also actively preparing for this market.
There will be an explosive growth of financial IC cards in the future. Over 20.7 million financial IC cards were issued in the first half of 2012, and the financial IC card market will experience a compound annual growth rate of more than 50% in the next five years. Along with the continuous promotion of the financial IC cards and the further expansion of the application of financial IC cards, the users will experience more secure and efficient financial "chip" services.
About CCID Consulting Co., Ltd.
CCID Consulting Co., Ltd., the first Chinese consulting firm listed in the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong (HKSE: 08235) and the first consulting firm which gets ISO 9001 international and national quality management system standard certification, is directly affiliated to China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Xi’an, Wuhan and Nanjing with over 300 professional consultants. The company’s business scope has covered over 200 large and medium-sized cities in China. CCID Consulting provides customers with public policy establishment, industry competitiveness upgrade, development strategy and planning, marketing strategy and research, HR management, IT programming and management services, investment and financing, and M&A. The company's customers range from government departments at all levels and diversified industrial parks, to industrial users in strategic emerging industries in new generation information technology, energy saving and environmental protection, biological science and technology, high-end equipment manufacturing, new materials, and new energy. CCID Consulting commits itself to become the No. 1 advisor for urban economy, the No. 1 consultancy for enterprise management, and the No. 1 branch for informatization consulting in China.