US card giant Mastercard, through a joint venture, has finally begun processing domestic payments in China.
This week, the Mastercard NetsUnion JV began processing payments made in China with Mastercard cards issued by the country’s banks. In addition, Mastercard-branded cards will now be accepted for both domestic and international purchases.
Michael Miebach, CEO, Mastercard, says: “With our local partner NUCC, our goal is to simplify the payments experience for China’s Mastercard cardholders both at home and overseas.”
The entry of foreign card schemes into China's multi-trillion dollar payments market has been hard fought over the years. Back in June 2015, the country eased restrictions on overseas firms obtaining licences by setting up units or acquiring a local company.
At the time Mastercard formed a majority-owned joint venture in collaboration with NetsUnion Clearing Corporation (NUCC).
In February 2020, the People's Bank of China principally approved the application from Mastercard NUCC to begin formal preparations to set up a domestic bankcard clearing institution.
Since that time, the JV has established standards, rules, structures and infrastructure in line with local regulatory requirements, and obtained the required certificates for a local switch business.
Then, last year the venture has received formal approval from the PBOC and the National Administration of Financial Regulation to commence domestic bankcard clearing activity, clearing the way for this week's move.
Ling Hai, chairman, Mastercard NetsUnion, says: “To offer more choice and deliver greater value for Chinese consumers and businesses of all sizes, we will expand the availability of Mastercard-branded products, facilitate the addition of millions of new acceptance locations across the country, and deliver seamless and safe payments experiences every day.”