After years of unsuccessful attempts to enter China’s massive $27 trillion payments market, Mastercard announced it has won approval from the People’s Bank of China (PBOC) to begin formal preparation to set up a bank card clearing institution in China. The news is a significant step toward Mastercard being able to do business in China, where large, domestic players currently dominate.
Last year, Mastercard set up a joint venture with NetsUnion Clearing Corp., a clearing house for online payments whose stakeholders included the PBOC, The Wall Street Journal reported. Mastercard together with NetsUnion then refiled its application as a joint venture called Mastercard NUCC Information Technology (Beijing) Co., Ltd. That application has now been approved, allowing preparatory work to begin.
According to regulations, the JV has to complete its preparation work within a year’s time for formal approval to begin domestic bank card clearing activity, the bank said.
“We are delighted and encouraged by this latest decision from the PBOC,” said Mastercard president and CEO Ajay Banga, in a statement. “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,” he added.