Mastercard has received approval from the People’s Bank of China (PBOC) to begin formal preparations to set up a domestic bankcard clearing institution in the country.
The entry of foreign card schemes into China's $27 trillion payments market has been hard fought over the years. Back in June 2015, it eased restrictions on overseas firms obtaining licences by setting up units or acquiring a local company.
At the time Mastercard formed a majority-owned joint venture NUCC Information Technology (Beijing) Co., Ltd, in collaboration with NetsUnion Clearing Corporation (NUCC).
The latest relaxation of regulatory barriers forms part of trade deal between the China and the US, which promised a 90-day approval cycle for applications from the likes of Visa, Mastercard and American Express.
Ajay Banga, president and CEO, Mastercard, says: "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.”
Mastercard has a one-year window to set up operations and apply to the People’s Bank of China for formal approval to begin domestic bankcard clearing activity.
The US card schemes face an uphill battle to win over Chinese consumers and merchants. The country currently has over eight billion cards in circulation and a vibrant mobile payment scene dominated by home-grown tech giants Alibaba and TenCent, both of whom last year launched versions of their mobile payments apps for foreign visitors to China