the support of relevant departments and government at various levels, china ’ s bankcard industry has made great achievements through joint efforts of the commercial banks, users and china union pay ( cup ). first, bankcard has been used more frequently and extensively by the end of 2005, there are 175 issuers of bankcards with the total issuance of 960 million. in 2005, the total bankcard transaction volume amounted to 4700 billion yuan, including 960 billion yuan of consumption transaction, which is 10. 4 times and 8. 5 times as much as that of 2000. the number of merchants accepting bankcards, pos machines and atms is 390, 000, 610, 000 and 80, 000 respectively, which is 3. 5 times, 3. 9 times and 2. 1 times as much as that of five years ago. more and more people have got used to the use of bankcards, and excluding the wholesale and real estate transactions, the proportion of consumption related bankcard transactions out of the total retail sales of consumer goods increased from 2. 1 % five years ago to nearly 10 %. in some economically developed cities, such as beijing, shanghai, guangzhou and shenzhen, the proportion is more than 30 %, which is near the level of 30 % - 50 % of developed countries. as commercial banks constantly innovate bankcard products and services, its functions, transaction channels as well the coverage have been improved. for instance, the function has been enriched from cash deposit & withdrawal and consumption to investment and financing. the transaction channels have been extended from traditional platforms such as pos machines and atms to new payment channels like on - line banking, and telephone banking. and the coverage has also been enlarged from consumption area such as restaurants, hotels and retail shops to public services and wholesales such as hospitals and schools. the constant innovation of bankcard product, a wider coverage and diversified payment channels all meet the payment demand of card holders and promote the use of bankcard. currently, bankcard is the most frequently used non - cash payment instrument by individuals. second, a national bankcard network has been basically set up to accelerate the build - up of a national bankcard network, as approved by the state council, china union pay ( cup ) is set up by the people ’ s bank of china. cup specializes in the construction and operation of a national integrated system of information exchange of bankcard and networking the national bankcard as a whole. commercial banks greatly support this system,

pbc plans to upgrade cup bin standard as the rmb card standard in the first half of this year, and initiates the project of upgrading this standard as the national standard. the newly issued bankcard with rmb account should adopt this technical standard, and change non - standard bankcards into standard ones as soon as possible. the issuance and acceptance of rmb bankcard should be standardized. first, the newly issued bankcards should comply with the standard of the national bankcard network, and have cup identifier. any rmb card in no compliance with the standard of international bankcard network is not allowed to be issued. second, domestic inter - bank rmb transaction should be connected with cup network, and no domestic rmb transactions are to be processed through foreign institutions. third, strictly classifying foreign currency account and rmb account when international dual - currency debit cards are used abroad. centering on the set - up of international brand, service should be better provided. cup should build up all - around, high - level service system covering member institutions, designated merchants, and cardholders. overseas market, which has already accepted cup bankcard, should be further exploited, and the acceptance quality should be improved. strictly complying with host country ’ s laws and regulations, cooperation with overseas bankcard institutions should be enhanced in a mutually beneficial way. fourth, setting up risk management system to guarantee the security of bankcard information and usage. risk management is significant both for a safe, efficient, and harmonious user ’ s environment and the long - term healthy development of the bankcard industry. in recent years, with the rapid development of the bankcard industry, risky cases increase every year. relevant departments should efficiently conduct risk management, strengthen risk prevention system, improve risk prevention level, set up bankcard risk prevention and resolve working mechanism, and guarantee the security of bankcard information and use. the security of financial information should be greatly emphasized. bankcard payment system is an important part of the national payment system. the analysis and process of transaction data and customer information can reveal some information of the economic activity of cardholders, companies and pubic service entities. to safeguard the security of financial information, domestic institutions are encouraged to play a bigger role in the bankcard payment system. issuers should build up domestic data process and storage system. as for the domestic and overseas transaction of rmb cards and the domestic transaction of foreign currency cards issued by domestic institutions, the process of transaction