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In a significant milestone, US card giant Mastercard has initiated domestic payments processing in China through a joint venture.
This week, the Mastercard NetsUnion JV commenced processing payments within China made with Mastercard cards issued by local banks. Furthermore, Mastercard-branded cards will now be accepted for both domestic and international transactions.
Michael Miebach, CEO of Mastercard, remarked, “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 extensive payments market, valued at trillions of dollars, has been a long and challenging process. In June 2015, the country relaxed restrictions on overseas firms obtaining licenses by allowing them to establish units or acquire local entities.
At that time, Mastercard formed a majority-owned joint venture in collaboration with NetsUnion Clearing Corporation (NUCC).
In February 2020, the People’s Bank of China primarily approved the application from Mastercard NUCC to commence formal preparations to establish a domestic bankcard clearing institution.
Since then, the joint venture has diligently established standards, rules, structures, and infrastructure in compliance with local regulatory requirements. It has also obtained the necessary certificates for a local switch business.
Last year, the venture received formal approval from the PBOC and the National Administration of Financial Regulation to commence domestic bankcard clearing activity, paving the way for this week’s momentous development.
Ling Hai, chairman of Mastercard NetsUnion, emphasized, “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.”
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