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IPS – In the Money Through a Merchant Focus
Maverick China Research, October 2007, Pages: 27
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.
- 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.
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
2.1.2 Organizational Structure
2.1.3 Management Team
2.2 Business Performance
2.2.1 Financial Performance
2.3 Services and Channels
2.3.1 Business & Operation Model
2.4 Markets and Coverage
2.5 Marketing and Branding
2.6.1 Bank Partners
2.6.2 Merchant Partners
2.6.3 Technology Partners
2.7 Competitive Analysis
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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