The People’s Bank of China (BPC) has approved the MasterCard application to begin formally operating a bank card clearing business in China.
Until now, only the local supplier China UnionPay is licensed to carry out transaction clearing services with bank cards in the country.
MasterCard arrives in the country through a joint venture (JV) with NetsUnion Clearing Corporation (NUCC), a company based in China that operates a clearing house platform for third-party payments. The joint venture will have to complete its preparatory work within a year, at which time it will be able to start operating in China if it receives approval.
” According to the relevant regulation, after completing the preparation work within a period of one year, you will resubmit your application to the People’s Bank of China for the opening of the business in accordance with legal procedures,” said the Chinese central bank .
This news comes a few weeks after the first phase trade agreement signed in Washington on January 15 by China and the United States. In an approach between China and the United States, both countries agreed, as part of the trade agreement, that the Chinese government would accept and review requests for US electronic payment services faster than it had previously.
China’s payment market is a valuable target for MasterCard, but it is already dominated by national players. UnionPay is the card market leader and Alipay and WeChat Pay control the mobile payment space in the country. In this connection, Mastercard may have trouble catching up in the country.
Moreover, the company ‘s CEO, Ajay Banga said during the release of its financial results, which l quote “late to the party because digital players there have already built substantially good business and, frankly, very good deals.” Now it is time to wait for the phase of a year that the company has been granted to prepare and see if it finally gets the authorization to operate in the Asian country.
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