Abstract
IPS is one of China' s oldest third-party payment providers, and through their
online payment platform, is one of the few Chinese payment providers making a
profit. To date, they have been successful where others have failed by
focusing on merchant-targeted online payment solutions. IPS has been able to
make money in spite of a very small registered user base of only 1.5 million.
In this report, we dissect how IPS, already 7 years in the industry, has been
successful so far and whether or not their strategy is suitable for future
growth in China' s payment industry.
Key Findings:
- IPS focuses on accumulating merchant partners and not individual users for
its online payment platform.
- IPS is one of the few Chinese payment providers with positive cashflow,
putting them in position to grow their business rather than start up a
business.
- Strong and aggressive sales and marketing teams, have led to high exposure
in local conferences, events, and the press.
- IPS leverages funding and technology from its Hong Kong-listed parent,
Universal Technology Holdings.
Table of Contents
1 Industry Overview: Key Factors Shaping Third-Party Payments in China
- 1.1 Continued preference for cash payments, but bank card payments rising
- 1.2 Credit card use remains low; debit cards widespread
- 1.3 Limited coverage of non-cash payment services
- 1.4 China UnionPay' s bank card monopoly
- 1.5 Quasi-online payment systems an interim solution
- 1.6 Two ISPs, 162 million Internet users
- 1.7 Two mobile operators, 500 million subscribers
- 1.8 Contactless smartcard use increasing but largely limited to buses and
subways
- 1.9 Government regulations and the "national interest"
2 IPS - In the Money Through a Merchant Focus
- 2.1 Company Overview
- 2.1.1 Ownership
- 2.1.2 Organizational Structure
- 2.1.3 Management Team
- 2.2 Business Performance
- 2.2.1 Financial Performance
- 2.2.2 Users
- 2.3 Services and Channels
- 2.3.1 Business & Operation Model
- 2.4 Markets and Coverage
- 2.5 Marketing and Branding
- 2.6 Partnerships
- 2.6.1 Bank Partners
- 2.6.2 Merchant Partners
- 2.6.3 Technology Partners
- 2.7 Competitive Analysis
- 2.7.1 Strengths
- 2.7.2 Weaknesses
- 2.8 Outlook
List of Figures
- Figure 1: Credit cards issued in China and in the US (M)
- Figure 2: Internet Users in China, 2001-2006 (M)
- Figure 3: Mobile Subscribers in China, 2002-2010F (M)
- Figure 4: China government groups involved in third-party payment
regulation
- Figure 5: Universal Technology Holdings Company Structure
- Figure 6: IPS Management team
- Figure 7: IPS Annual Transaction Volume, 2001-3Q2007 (RMB M)
- Figure 8: IPS Annual Number of Transactions, 2003-2006 (M)
- Figure 9: IPS Average Transaction Size (RMB)
- Figure 10: IPS Fee Structure for Merchant Partners
- Figure 11: IPS Operation Model
- Figure 12: IPS Payment Service Coverage by Channel
- Figure 13: IPS logo
- Figure 14: IPS Bank Partners
- Figure 15: Select IPS Merchant Partners
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