Payment gateway systems in China and Korea are set to benefit from a collaboration of two players in the payment solutions market. Korea's CyberNet Information System (CIS) and Shanghai-based Huateng Software Systems Co (Huateng) have formed an alliance to develop internet payment and integrated circuit (IC) card terminals and solutions for both nations.
IC card terminals are capable of various payment-processing functions, including credits and debits, electronic cash payments and loyalty programmes, explains Young Hye Song, marketing manager for CIS. The device stores data using encryption algorithm, making counterfeiting difficult.
The technology that Huateng created for Chinese online vendors will be used to develop the internet payment system for Korean business-to-consumer (B2C) sites. In return, Huateng will leverage off CISÆs experience in providing technology for IC card terminals. China is piloting a national IC card project with a view to setting a standard for a financial IC platform in China. Huateng will work with local banks and financial institutions in China during the pilot scheme.
The companies previously joined forces to develop an internet payment system for Nice Card Information (NCI), a Value Added Network (VAN) company in Korea. Korean VAN companies are authorized to distribute and install payment terminals; a function typically handled by banks elsewhere in Asia. NCI, as one of the largest VAN companies, is used to connect every bank in Korea, including heavyweights Hanvit Bank, Kookmin Bank, Hana Bank and Korea Exchange Bank. Major credit cards such as Visa and MasterCard are also linked to vendors through NCI payment systems.
The alliance also offers CIS the opportunity to move into the China market, which, according to CIS' Song, is largely closed for protectionist reasons. CIS plans to export more than 20,000 IC card terminals to Europe, the Middle East and Africa this year and is targeting revenues of $25 million.