Mastercard has announce that it has received in-principle approval from the People’s Bank of China (PBOC) to begin formal preparations to set up a domestic bankcard clearing institution in China.
The application was submitted by Mastercard NUCC Information Technology (Beijing) Co., Ltd, a joint venture of Mastercard and NetsUnion Clearing Corporation (NUCC).
China is opening up its financial markets this year to allow foreign firms to set up fully owned operations to run insurance businesses, asset management and investment banking. Back in June 2015, it eased rules to allow foreign bank-card clearing providers to obtain licenses by setting up units or acquiring a local company, ending a monopoly by state-run China UnionPay.
Mastercard and Visa have long complained that their delayed entrance into China means they’ll be pitting themselves against large domestic players in a market that has seen mobile payments explode in recent years. Mobile transactions topped 190 trillion yuan ($27 trillion) in China in 2018, making it the world’s largest such market, according to iResearch. China had 8.2 billion bank cards in circulation at the end of September, with 90% of them debit cards.
“We are delighted and encouraged by this latest decision from the PBOC,” comments Ajay Banga, president and CEO, Mastercard. “China is a vital market for us and we have reiterated our unwavering commitment to helping drive a safer, more inclusive and seamless payments ecosystem for Chinese consumers and businesses. We remain focused on working with the Chinese government and local partners to grow the overall payments infrastructure.”
The strategic collaboration between Mastercard and NUCC is founded on mutual synergies, and will drive a simple, safe and smart payments experience in a market well regarded as being one of the global frontrunners in digital payments technology. Within one year, the company will be able to apply to the People’s Bank of China for formal approval to begin domestic bankcard clearing activity.
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