Mastercard’s joint venture in China has been the green light given by the People’s Bank of China for it to begin formal preparations to set up a domestic bankcard clearing institution in China.
Mastercard’s joint venture with NetsUnion Clearing will need to complete preparation work within a year, following its approval to begin operations in the country, China’s central bank said in a press statement on Tuesday.
The approval of the preparation application of the bank card clearing institution of Wanshilian is another concrete reflection of China’s opening up of the financial industry and deepening financial supply-side reform, PBOC said in the statement.
In 2015, China opened its bank card clearing market to foreign players but in practice has been slow to actually spur competition currently still dominated by state-owned UnionPay. The first foreign company to start preparations for the business was American Express in 2018 through a joint venture with Chines fintech firm LianLian.
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, Ajay Banga, president and CEO, Mastercard, said in a statement.
China’s mobile payments market is worth some $27 trillion, according to iResearch.
American Express is also close to receiving approval for its bank card clearing business in China. Earlier in January, the People’s Bank of China announced the acceptance of its application.