Mastercard is the latest foreign company to begin breaking into the payments market in China, the company announced this week.
According to a press release, the People’s Bank of China (PBOC) has given Mastercard in-principle approval to create a bankcard clearing institution in China. The application was submitted through a joint venture between Mastercard and NetsUnion Clearing Corporation called Mastercard NUCC Information Technology (Beijing) Co. Ltd.
“We are delighted and encouraged by this latest decision from the PBOC. 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,” Ajay Banga, president and CEO of Mastercard, said in the release.
According to a report from Frost & Sullivan last year, the mobile payments market in China is expected to grow to $96.73 trillion by 2023 – a three-fold increase from the volume in 2017.
PayPal announced last fall that it was the first foreign payments company to receive a license to provide online payments in China. It entered the market by acquiring 70% interest in a company that already held a payments license then.
American Express formed its own joint venture in China in 2018, gaining preliminary approval to start setting up its network there. PBOC announced in January that it had accepted AmEx’s application to begin operations, bringing the network one step closer to final approval.
Mastercard said that it will be able to apply to PBOC for formal approval to begin operating there within one year.