Information Technology: Boosting the smart card industry's continued prosperity

[Summary]

Event Description On November 3, 2014, the People's Bank of China issued the Notice on Further Improving the Application of Financial IC Cards (hereinafter referred to as the “Notice”), and proposed a specific timetable for the application of the next financial IC card.

Since April 1, 2015, the newly issued financial IC cards of each card-issuing bank shall comply with the PBOC3.0 specification; at the end of 2015, the non-received ratio of urban POS terminals in the 110 public financial card public service areas will increase by at least 20 percentage points year-on-year. Since January 1, 2016, mobile banking services such as issuing banks and bank card clearing institutions should be based on card-based trading methods based on financial IC card chips.

The event commented that the central bank continued the financial IC card promotion policy, and the financial IC card industry boom cycle was significantly longer: following the 2011 "People's Bank of China's Opinions on Promoting the Application of Financial IC Cards", 2014 "On the gradual closure of financial IC card downgrade transactions" After the Notice of the Matter, the Central Bank issued the Notice again, aiming to extend the promotion policy of financial IC cards and provide standardized guidance for the development of financial IC cards after 2015. We believe that the “Notice” of the central bank will actively guide commercial banks and clearing institutions to further promote financial IC cards, reform POS machine acceptance terminals and carry out card payment services while making technical specifications for financial IC cards. Cultivate users' financial IC card usage habits and promote the accelerated replacement of the stock magnetic stripe card to the financial IC card. It is foreseeable that with the gradual release of the replacement demand for 3.4 billion bank magnetic stripe cards, the economic cycle of China's financial IC card industry will be significantly longer.

The policy supports card mobile payment, and the Internet financial terminal ushers in the opportunity of accelerating development: The central bank clearly requested that from January 1, 2016, commercial banking and clearing institutions should adopt mobile payment services based on card payment, while commercial banks When developing online mobile financial services based on financial IC card chips, Internet financial terminals have become an important part of connecting financial IC cards and mobile terminals. It can be seen that commercial banks carry out online mobile financial services based on financial IC card chips. Will bring rare development opportunities to Internet financial terminals. We have observed that ICBC has completed small-volume bidding for Internet financial terminals, and subsequent Internet financial terminals are expected to usher in an opportunity to accelerate development.

The proportion of POS terminals is not accepted, and the mobile payment hardware environment continues to improve: the central bank demanded an increase in the acceptance rate of POS terminals, promoting the development of offline mobile finance based on financial IC card chips, and also creating mobile phone-based NFC mobile payments. Good hardware environment. It can be foreseen that with the improvement of the acceptance environment, China's NFC mobile payment will show an accelerated development trend.

Investment suggestion: Based on this, we are optimistic about the development prospects of financial IC cards, Internet financial terminals, and NFC mobile payment related manufacturers.