Approval obtained from People’s Bank of China (PBoC) to begin formal preparation to set up a bank card clearing institution in China
MC are not the first US credit institution to require approval from PBoC. Also, Amex (American Express) had submitted the file in 2018. PayPal is targetting GoPay (PP are willing to pay for 70% of GoPay stakes).
Mastercard together with NetsUnion (both companies having set up a joint venture last year whereby NetsUnion is a clearing house for online payments whose stakeholders included PBOC) refiled this year its application as a joint venture called Mastercard NUCC Information Technology (Beijing) Co., Ltd. That application has now been approved.
According to the source below, it seems that the approval of MC (as well as of Amex – through with Amex’s Chinese partner LianLian Group – they both have a joint venture) are a part of the U.S.- China trade deal, which required Beijing to accept and review payments firms’ applications in a timely manner, which hadn’t happened before.
Anyway, they have competitors in Chinese market. China had 8.2 billion bank cards in circulation by the end of September 2019, 90% of them being debit cards. For example, local actors like WeChat Pay will fight to avoid losing market share.
Yet mobile payments in China are expected to grow 21.8% from 2017 to $96.73 trillion by 2023, and the total number of active mobile payment customers is expected to reach 956 million by 2023, up from 562 million in 2017.
Interesting to watch these evolutions: either China joining a western style of payment, or US companies will not succeed there. Will see.