China opens up to Visa and MasterCard

China opens up to Visa and MasterCard

China is finally preparing to open up its huge payments card market to foreign firms such as Visa and MasterCard.

The People's Bank of China says that outside players can apply for a license but that they must hold 1 billion yuan ($152 million) in registered capital in a local company, be based locally and meet cybersecurity standards.

China saw 55 trillion yuan in consumer card transactions last year and the country is projected to become the biggest card market in the world by 2020.

Visa and MasterCard have been lobbying for a way into the market - in which local scheme China UnionPay has long held an effective monopoly - for years.

China promised to loosen UnionPay's grip after the World Trade Organisation ruled in 2012 that the US firms were being discriminated against in the country. The WTO entered the fray after the US government made a complaint.

Firms that apply for licenses will have their case reviewed by the central bank, which will make a decision within 90 days. Successful applicants will then have a year to set up shop.

In a statement to Reuters, Visa says: "We are reviewing the new regulations and look forward to the opportunity to formally submit our license application for early consideration."

Meanwhile MasterCard says it is equally keen to make its move into the fast-growing market while UnionPay insists that it supports the rules and will compete with its new rivals.

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