CBI member, Mastercard has announced that it has secured Chinese government approval to enter the country’s electronic payments market.
In a statement on Tuesday evening, China’s central bank and banking regulator said that Mastercard’s application to launch a joint venture with a local company had been approved.
Mastercard will enter into a joint venture with the Chinese Central Bank affiliated Netsunion Clearing Corporation, and begin bankcard clearing services.
Netsunion was established in 2017, and all third-party payment services involving bank accounts must go through its platforms, cutting out the possibility for direct clearing between the banks and service providers.
Mastercard president and CEO, Ajay Banga said: “Mastercard are delighted and encouraged by this latest decision from the PBOC. […] China is a vital market for us, and we have reiterated to unwavering commitment to helping to drive a safer, more inclusive and seamless payments ecosystem for Chinese consumers and businesses. We remain focussed on working with the Chinese government and local partners to grow the overall payments infrastructure.”
The approval comes three weeks after the signing of the US-China Phase One Trade Deal, which included wording on accelerating approvals for US card companies looking to enter the China market. Under the terms of the agreement, China said it would formally rule on US card companies’ applications within one month of their submission. Mastercard, along with Visa and American Express are cited specifically in the text of the agreement.
Mastercard said in a statement that it will: “Be able to apply to the People’s Bank of China for formal approval to begin domestic bank card clearing activity” within a year.
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