The biggest U.S. card companies just moved a step closer to gaining access to China’s $27 trillion payments market.
China said it won’t take longer than 90 days to consider applications from providers of electronic-payments services such as Mastercard, Visa and American Express Co, according the text of a landmark trade agreement with the U.S. It should be an especially welcome reprieve for Mastercard and its partner NetsUnion Clearing Corp., which set up a venture in March that is still awaiting approval from the People’s Bank of China to begin operations.
The move shows progress in the U.S. payment networks’ battle for access to mainland China, which has been a point of contention in the trade dispute. Officials from the world’s two largest economies finalized a bevy of deals before signing off on the first phase of a sweeping trade agreement, which they have sought to cast as a major breakthrough in relations.
As part of the agreement, the U.S. also pledged not to discriminate against China UnionPay, or CUP, or other Chinese electronic payment services.
Mastercard and Visa have long worked with Chinese banks to slap their brands on cards to facilitate transactions that consumers make outside China. But this announcement means the networks will now have a chance to compete for those cardholders’ domestic spending as well.