MasterCard to apply for China payments licence - Reuters

MasterCard is considering an application to become a licenced payment services provider in China, according to Reuters.

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MasterCard to apply for China payments licence - Reuters

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The plan follows the Chinese government's recent decision to open its payments market to international providers under the condition that they meet certain cyber security rules and hold more than CNY1bn of registered capital in a local company.

MasterCard is reportedly yet to decide if it will recruit a partner to enter the Chinese market or go it alone. China's card payments market is estimated to be worth more than CNY55trn ($8.25trn) and is forecast to be the world's biggest by 2020. The market is currently dominated by state-owned China UnionPay.

Both MasterCard and Visa, the world's two largest card providers, have lobbied China for direct access to its cards market for more than 20 years.

Ann Cairns, Mastercard's president of international markets, told Reuters that China is "pretty crucial" to the company's future but stressed that while the cybersecurity and capital rules present no obstacle, it has to consider what business model or local partners to adopt before jumping in.

MasterCard's co-president for Asia-Pacific, Ling Hai, did not rule out making an application before the year-end but added that the "uncertainty and variability in the process" could mean it takes one or two years to be granted a licence.

In 2013 it was reported that China's regulator had blocked Mastercard from processing any card transactions settled in the local currency. China was also rebuked in 2012 by the World Trade Organisation for discriminating against the likes of Visa and MasterCard in its domestic market in favour of local players such as China UnionPay.

 

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