ummm

Went to see this IT company that develops pre-paid cash cards for
merchants. Very interesting. And very interesting name too, Circle
Pleasure. What the heck is this name? Maybe it's Korean origin has
some translation problem. I was in its office back in February.
Winding forward to now, its product is maturing; also have some
interesting news about the pre-pay cash card market.

There are six major players in this market. Each requires its own POS
machine. So if one visits a major theater, one can see a bank of POS
machines by the ticket window. Now no more; thanks to the China
gov't. This business is changing. China Mobile and its partners are
setting up a competing company getting into this game. The previous
player's its cards virtually is null and void. A virtual cash left on
the table at estimating of RMB 300 millions. This new China Mobile
venture is called Tong Lian with a registered capital of RMB 3
billions. So what gives? I don't know. Maybe it's one way to make
outsiders think there is some form of competitions.

Tong Lian will give out free POS machines initially. Later on, it
might charge about RMB 20 per month. That's nothing. And there are 3
types of POS available. Dial-up, 3G and Internet.

This company, Circle Pleasure, I visited this morning is in the game
with Tong Lian. So will be very advantages to it. Also, it already
has a big contract with Minsheng bank. Apparently, this bank pays
portion of the monthly salary to some of its employees with this pre-
pay cash card. The reasons are: Lower the taxable bracket of the
employees. Apparently, anything less then 5,000 RMB a month is taxed
at 10% or so vs 40%. Also, the bank can write off the card purchase
as biz expense and lower on the profit tax. Smart move huh? U think
Canada is ready for this type of "bend the rule" scheme?

Wonder why not that many small to medium size companies in Shanghai
are catching on to this yet. The pre-paid cash card can enjoy
discounts from participant merchants as well as collecting points for
redemption. Plus, one can pay all utility bills and recharge credit
on mobile phone.

And if this can lower the tax rate, will the local and central gov'ts
aware of the loss of tax revenue? O wait, they have trillions so who
cares.