Saturday, July 24, 2010

Setting up a new scheme: Learning from CUP

Traversing down the roadmap of bringing a payments scheme to life is interesting.  Once a scheme is launched, most of us think that all the features of the scheme come to life in relatively short order.  As an entire industry is affected by a new scheme coming to life, getting a good feel for timeline is critical to success of many products/ventures that are dependent on the scheme of the land.

Features of a typical scheme include:
  • Domestic
    • ATM
    • Retail (Debit, Credit)
    • Online
    • Other payment networks (Postal system, Rural, Cooperatives...)
  • Connectivity / bilateral agreements with other schemes (primarily 'international'), primarily around card acceptance
  • Connectivity / bilateral agreements with international banks (primarily 'international') primarily around card acceptance

While launch of new schemes are not commonplace, China UnionPay (CUP) is a recent addition  The journey to setup a scheme is hard work and takes years, this post will look at some of the milestones once a scheme has been 'launched' (source)
  • 1993: Creation of CUP started as part of the Golden Card Project
  • 2002: Launch of scheme
  • 2003: Issue of new cards
  • 2004: CUP cards accepted in Hong Kong
  • 2005: CUP cards accepted by ATM/POS offered by Citicorp network
  • 2006: CUP cards accepted in Australia
  • 2007: Multi-factor authentication for online payments
 While the world is getting smaller, and technology becoming more of a commodity, the above timeline might still be representative of a new payment scheme roadmap.

Do you see the trend for new payment schemes coming up?  Do you see a different timeline?  Appreciate your comments.


  1. Well, NPCI (National Payments Corporation of India) too has similar plans.

  2. Prashant, That is very interesting. The question is the timeline for the rollout. Will it be reasonably big-bang, or a roll-out over 3-5 years. The readers of this blog would be very appreciative if you can point to such information. Thanks.