In an interesting turn of events it seems that a December press release concerning an apparent strategic alliance between a small UK-based tech firm and China Union Pay (also know as Union Pay), the Chinese state-sponsored payment network now considered the largest in the world by card volume, was misleading. In reality, the tech firm, Powa Technologies, had apparently entered into a minority equity ownership agreement with a small Guangzhou-based internet company called CN2Pay, which had some sort of relationship with a Union Pay subsidiary. The trouble with the press release was with the terminology, which was picked up by various news outlets and exaggerated into a larger-than-reality announcement.
The BBC reported at first that Powa had “formed a ‘strategic alliance’ with China’s biggest payments processor, UnionPay Network Payments [sic]…..”And, yes, the Financial Times reported it too, saying Powa had “signed a joint venture with China UnionPay” — a line we repeated in February, when we first revealed trouble at Powa.
It seems that subsequent to these releases, Union Pay demanded a cease and desist, as well as proof of any partnership with their subsidiary, which did not exist. This is a good example of a press release initiator (Powa) benefitting from inaccurate interpretations (however misleading or unclear the original release) but also not subsequently countering the stories with a clear corrective statement. Once confronted by the third party non-participant (Union Pay), things changed. A word to the wise, as a mentor might say
Which is fair enough. If you take a careful look at the press release, which features China UnionPay’s logo alongside Powa’s, you might agree that it is “very clear”. It’s just as clear, we would suggest, as this quote he gave to the BBC: “Why did China UnionPay decide to partner with a little British technology company?” said Mr Wagner. “We’ve trumped ApplePay and the rest of the world here.”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
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