【Technology】 bank card "for the core" curtain opened the financial IC card business breakout





The domestic financial IC card chip companies finally ushered in a long-term development opportunities.

According to the provisions of the central bank, from 2015 onwards China will enable the security of better financial IC card to replace the magnetic stripe bank card, magnetic stripe bank card will be fully out of the stage of history. At this stage, "for the core" of the curtain has been opened, the industry according to the Chinese market, pure magnetic stripe bank cards up to billions of sheets to predict, this will be a billions of cards, tens of billions of RMB Of the huge market.

For a long time, China's chip market has been monopolized by foreign-funded enterprises. Foreign-funded enterprises as a result of early start, strong technology, so that domestic financial IC card chip companies have been difficult to hold a candle. Coupled with the previous domestic financial IC card industry has no national certification standards, so foreign certification bodies are not open to domestic financial IC card chip companies, which make the situation of domestic manufacturers is extremely passive.

However, with the bank card "for core" tide of the beginning, the domestic financial IC card chip companies have found a breakthrough opportunity.


China's chip card "big migration" began in 2011.

March 15, 2011, the People's Bank of China issued the "People's Bank of China on the promotion of financial IC card application work," the country officially launched the migration of bank card chip, decided to January 1, 2015, the economy Developed areas and key areas of cooperation industry, commercial banks issued to RMB accounts for the settlement of the bank card should be a financial IC card, all accepted the bank card network terminals can accept the financial IC card.

May 14, 2014, the People's Bank issued "on the gradual closure of the financial IC card downgrade transaction-related matters notice", decided to deploy a unified nationwide unified financial IC card downgrade the gradual closure of the transaction, which further accelerated the magnetic stripe bank card Comprehensive suspension of the process.

The central bank data show that by the end of the third quarter of 2014, China's total financial IC card issuance has exceeded one billion, the first three quarters of last year, new financial IC card issuance of 450 million, accounting for new bank card issuance ratio of more than 80%.

"At present, China's pure magnetic stripe bank cards on the market up to 3.4 billion, so the large-scale 'core' will be a billions of cards, tens of billions of dollars of the huge market," Shanghai Fudan Microelectronics Group Co., Ltd. (1385HK, hereinafter referred to as Fudan Microelectronics) Assistant General Manager Liu Yifei said.

As a result, along with "change the core" tide of the beginning, the domestic financial IC card chip companies will usher in large quantities of business opportunities. And from the Chinese government level of support, but also makes these enterprises even more powerful.

Since 2011, China UnionPay and the central bank, Development and Reform Commission, Ministry of Industry and other ministries jointly promote the establishment of national financial IC card security testing center, the center completed in late 2013 and passed the acceptance. National Development and Reform Commission also supported the "national financial IC card testing center" special. At the same time, the central bank began to organize chip design companies, card merchants and commercial banks to communicate, promote products, research on domestic chip financial IC card trial trial. Since 2014, some commercial banks in Shanghai, Chongqing, Guangdong, Henan, Hunan pilot trial.

In 2012, the National Development and Reform Commission, the State Cipher Bureau, the Ministry of Industry and the People's Bank of China set up the "Financial IC Card and Password Application Specialization", and ICBC and CUP are the six pilot financial institutions. At present, China has a total of six chip design enterprise 13 chips have passed the chip security test.

February 5, 2013, domestic financial IC card to follow the national standard PBOC 3.0 specification officially released for China's financial IC card unified the new specification. PBOC 3.0 specification is to achieve the card and terminal encryption algorithm localization, to ensure the safety of financial transactions, to achieve self-controllable. In addition, the central bank also issued a "do a good job on the financial IC card application work notice," clear since April 1, 2015, the banks issued a new chip bank card should be consistent with PBOC3.0 specification.

Thus, the broad market demand for space and government support, gave the domestic financial IC card chip business has brought a rare opportunity for development.


In addition to the favorable external environment, as the domestic production of financial IC card chip first tier of large enterprises, Fudan Microelectronics, general manager of Liu Yifei also full of confidence in their products.

"Fudan Microelectronics financial IC card chip in full compliance with domestic user needs, the company made all the preparations for mass production, there are already some banks at the beginning of use, and we are confident to catch up with foreign financial IC card suppliers" , Liu Yifei said to the Economic Observer.

Shanghai Huahong integrated circuit limited liability company (hereinafter referred to as Hua Hong design) Xie Wenlu, deputy general manager also said that in order to promote their market share of the chip, Hua Hong design constantly in the product of technological innovation.

Huahong chips designed to support international and domestic two sets of algorithms, which means that the chip than the cost of supporting a set of algorithms to be much higher, it must be through the chip design to change the chip structure to ensure that support for two sets of algorithms chip Will not increase the cost of the bank, so you need to design innovation. According to Xie Wenlu introduced custom design Huahong design breakthrough in technological innovation. A chip there are tens of millions of transistors, hand is very difficult to complete, the general use of automated tools to do, but the automation tools and can not achieve the optimal performance, and Hua Hong design through the intervention of the important modules of the manual fine , Successfully achieved in improving performance while also reducing costs.

At the same time Xie Wenlu also pointed out that, due to the country's industrial level, the domestic chip manufacturing process and foreign than there will be a generation or two of the gap, so for this problem, Hua Hong design solution is to produce a generation, the development of generation, , To speed up the upgrading of the company. He hoped that through two to three years, the company's technology level to the most advanced foreign companies to achieve the level.

But it must be clear that, at present, although the domestic business confidence in the future of the chip market full, but compared with the objective of foreign companies still exist many gaps.

Last year in September, a small brokerage seminar, the People's Bank of China financial IC card leading group office director Li Xiaofeng said, "Now China hardware terminal no problem, but the chip is China's soft rib, even though the central bank to push the financial IC card Chip localization, but the Chinese chip technology can not keep up. " "Smart chip industry in the European companies started, and indeed there are certain first-mover advantage, the world's other countries have long completed the magnetic stripe cards to the financial IC chip card conversion, and our country for the core years before , So foreign chips in the country for some time leading, "Liu also points out. It is understood that China's financial IC card chip market, mainly by the Netherlands NXP, Germany, Infineon and South Korea's Samsung and other international giants to divide.

At the same time as the Chinese banks and foreign chip makers have many years of cooperation, a time it is difficult to easily replace the domestic chip. "Domestic financial IC card chip has never been large-scale production, nor experienced large-scale application of the test, and the bank's credit system is the core asset, the bank can not risk their own reputation risk, to reduce the hundreds of millions or several Billions of procurement costs, "an ICBC staff responsible for the procurement of chips told the Economic Observer.

In addition, although the state has introduced PBOC3.0 technical standards, but because it is not an international standard, so domestic manufacturers are still calling for PBOC3.0 technical standards will be extended to international standards, and to international standards and compatible. However, because China's key system and the international key system is different, so although PBOC3.0 is based on the EMV standard design, but it can not be compatible with the EMV standard.


So the domestic enterprises in order to break through the success of the environment, there are a lot of way to go.

Xie Wenlu recent efforts to expand the practical application of the product, "has been with a dozen banks for the sample test cooperation." He told the Economic Observer, on the one hand, Hua Hong design to take the commercial bank to do a small amount of card issuance pilot continuous testing of product quality, on the one hand the opportunity to use domestic joint card. According to Chinese regulations, for national security considerations, co-branded cards must all use the domestic chip, as of 2013, China has issued a total of 1.2 billion second-generation ID card, social security card 629 million. Hua Hong design to increase the promotion of dual interface card chip in the joint card industry applications, has been issued more than 700 million.

In addition, Liu also believes that domestic enterprises to open up the downstream to keep up with the downstream card, bank, system technology business relationship is also very necessary. He pointed out that the independent controllable innovation will be the future Fudan Microelectronics focus on the layout, "chip production, processing, manufacturing, testing is a very long industry chain, every link of the industry chain, the domestic chip manufacturers should have The ability to control, if only to control some of the other parts of many of the enterprises or by foreign control, it has not yet achieved self-controllable effect.

At the same time, Fudan Microelectronics also plans to continue to invest in R & D costs. "Domestic companies need to invest more in order to demonstrate to their banks, governments and consumers that their product quality and safety are credible," said Liu. "Companies must keep up with the pace of development, with respect to compatibility, security And a variety of certification for the production technology and testing technology to enhance the many aspects of the need for continuous R & D investment last year, Fudan Microelectronics R & D investment is about 200 million, the future will be based on sales to continue to add than to add.

In addition, the future Fudan Microelectronics will be in banking, financial institutions, mobile phones, wearable equipment and other fields to promote financial IC card chip. At the same time the company has developed an NFC online service platform (NFC refers to non-contact IC card, contactless reader integrated in the mobile phone or smart terminal technology, non-contact IC card refers to non-inserted card) to dock with various industry application vendors. At this stage the platform has been for the millet Shanghai bus card application provides the air query, air and other operational services, the future of the financial IC card functionality is also possible in this online service platform to achieve.

To sum up, the domestic chip companies are currently the greatest efforts to foreign capital to snatch the Chinese chip market. However, in the view of many people in the industry, due to technology, supply chain, product improvement and internationalization of the standard will take time, so at this stage, domestic manufacturers compete for market share, the most effective strategy will probably be a price war, Whether it is the cost or price to be much lower than the foreign chip.

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