Yucheng's POS merchant acquiring services for BCOM Beijing include merchant acquisition, deployment, installation and maintenance of POS terminals, merchant training, as well as a 24-hour technical support hotline. As part of the agreement, Yucheng will purchase the POS terminals and supply consumables and repair parts for the terminals; fees generated from transactions processed via the installed POS terminals will be shared with BCOM Beijing under a long-term agreement. The POS terminals are designed to accept all major local and foreign credit and debit cards, including China UnionPay, VISA, MasterCard, Amex, and JCB.

As spending power of Chinese consumers has risen dramatically in recent years, bank cards are quickly becoming a major means of payment. According to the statistics of the People's Bank of China, last year 1.47 billion bank cards were issued in China, up 30% from 2006. 21% of the country's consumption value was made via bank cards in 2007, up from 17% in 2006. Annual fee income from cardholders and payment processing fees from merchants are driving banks to issue more cards and increase their POS installation base. In order to accelerate the deployment of POS terminals to enable electronic payments by consumers, many banks have chosen to outsource their POS merchant acquisition functions to third-parties such as Yucheng.

Yucheng's CEO, Mr. Weidong Hong stated, "We are proud to be associated with Bank of Communications, and provide our POS merchant acquiring services to help accelerate this new revenue stream for them. Bank of Communications is a credible brand name in China's banking industry, and enjoys strong franchise among both consumers and merchants. This partnership, once again, endorses Yucheng's reputation and competitiveness in the POS merchant acquiring services. We are confident our reputation and industry track record positions us to secure more POS merchant acquiring partnerships from leading banks going forward in 2008."

Mr. Hong added, "With our existing partnership with China Merchants Bank and China Construction Bank, Yucheng is able to offer to merchants POS terminals from three leading banks, each featuring different service level and content. As merchants tend to prefer using POS terminals from their existing relationship banks, our increasing number of partnership banks gives us an advantage to further win new merchants. As China is expected to experience a period of accelerated growth in POS deployment over the next few years, Yucheng, as a Nasdaq listed company engaging in POS merchant acquiring, is poised to capitalize on this unprecedented opportunity."