China UnionPay Data and Arcot Systems Form Partnership To Strengthen Risk Management and Anti-Fraud Measures

Strategic Development Agreement Expected to Reinforce International Competitiveness for Internet Transactions

Sunnyvale, California., and Shanghai, China -- June 27, 2007 — China UnionPay (CUP), the national bankcard association in China, through its subsidiary China UnionPay Data (CUP Data), and Arcot Systems today announced a partnership that will help minimize Internet transaction fraud. Under the licensing and development agreement, CUP Data will use Arcot's TransFort family of solutions in the joint development of a common risk management outsourcing service, for marketing to card issuers in China.

Established in January 2003 in Shanghai; CUP Data provides professional and highly customizable bank card processing platform outsourcing services for financial institutions; it also offers system integration, solutions, services, platform and network infrastructure associated with bank card issuing and processing in order to help customer banks succeed in the highly competitive banking card industry.

Arcot Systems is a leading provider of secure e-payment, strong authentication, credential management, and digital signature software solutions. Arcot Systems has a suite of software-based solutions expressly designed to meet the need for on-line transaction authentication, identity management and secure digital signature solutions.

As a start, CUP Data will use Arcot's TransFort solutions to enable customer organizations to roll out their credit card Internet transaction authentication programs including Verified by Visa, MasterCard SecureCode, and JCB J/Secure based on the 3-D Secure™ Protocol that Arcot co-invented with Visa in 2000.

Wang LiWei, EVP of CUP Data said, “This agreement is an important step towards achieving our vision of using one bankcard for transactions around the world. Only the most robust security measures will give card issuers, banks, and customers the confidence necessary to make this happen, regardless of time zone, geography, or currency. Arcot provides that unique combination of transparent, fail-safe technology that is easy to use -- the best of its breed. TransFort is the leading 3-D Secure™ solution used by over 11,000 banks globally and we are pleased to introduce it to the market in China.”

Ram Varadarajan, president and CEO of Arcot said, “CUP Data is the recognized leader in card issuing services across all of China. As Internet transactions become the norm, we must implement the same security measures that have made cash and in-person credit cards acceptable. Customers can complete their internet transactions with confidence thanks to the powerful combination of CUP Data's hosted card system platform and Arcot's TransFort solutions.”

Under the agreement, Arcot is also designating CUP Data as an authorized reseller and integrator for Arcot's products, providing customization/localization and after-sale service work to Arcot's bank or financial institution customers in China. Both parties will jointly market, promote and sell Arcot Solution to other banks or financial institutions in China.

Arcot's TransFort family maintains legal enforceability, validates that the correct individual approved the transaction, and provides easy detection of unauthorized changes, reducing the incidence of fraudulent and disputed online payments and their associated costs. The product is designed to be as unobtrusive as possible, so the shopping experience has minimal interruption while providing chargeback protection for the online merchant.

About China UnionPay Data
China UnionPay Data (CUP Data) is a subsidiary of China UnionPay, established in January 2003 in Shanghai with registration capital of 185 million RMB. CUP Data provides card issuing outsourcing and disaster recovery services for financial institutions; it also offers extended services associated with card issuing data processing and disaster recovery including software development, customization, resale, systems integration and related technical consultation and professional services. The company's goal is to promote the development of China's banking card industry by offering the professional data processing outsourcing services to card issuing organizations in order to minimize the repeated investment of community resources.