This system will launch in Shandong Province, one of the country's most popular tourist destinations in the second quarter of 2012, and will be deployed with the Shandong Tourist Administration to enable the purchase of admission tickets to various points of interest throughout the province.

"We are delighted to further expand our relationship with China UnionPay to include this new mobile payment solution, which provides further evidence of our technological leadership and important first-mover advantage in the market. The convergence of online and offline transactions represents an exciting breakthrough in MPS technology, and one that we believe will significantly increase end-user adoption of the technology," said Mr. Qiang Li, CEO of Trunkbow. "In addition to prepayment and redemption functionality, we believe that the potential exists for additional applications to enhance the value proposition for merchants by enabling new customer engagement tools. With approximately 150,000 UnionPay POS terminals deployed in Shandong Province, this represents a sizeable launch market for the technology, particularly given Shandong's popularity as a tourist destination. We believe that this new application will be well-received by brick-and-mortar retailers and consumers and look forward to further collaboration with China UnionPay in other regions and other segments of the market."

Under the agreement, Trunkbow and China UnionPay will jointly deploy this new payment system, which supports the purchase of event and attraction tickets, as well as physical goods in a variety of retail locations. The application will enable consumers to purchase products or services via a smartphone browser or dedicated app, with proof of purchase delivered to a customer's handset in the form of a digital voucher or scannable code. The purchase is verified and completed when the subscriber inputs or scans this code on a China UnionPay Point-of-Sale terminal at the merchant location, and payment is processed through the China UnionPay clearing system at the time of redemption. Trunkbow will receive sales commission, transaction fees, as well as advertising revenue from this system and related apps.