Mastercard to Expand Acceptance in China
Mastercard secures long-awaited approval to expand its services in China's massive payments market, following efforts to enhance business relations between Beijing and Washington
Sign up for CNN's Meanwhile in China newsletter to stay informed about the country's rise and its global impact. Mastercard has finally received approval to expand its services in China's extensive payments market, following recent efforts made by the country's leader to strengthen business relations between Beijing and Washington.
Mastercard, the US credit card giant, announced on Monday that it has obtained approval from the central bank of China and the financial regulator to commence a bank card business in China. This venture will be conducted through its joint partnership with NetsUnion Clearing Corporation (NUCC). Following an announcement by the Peoples Bank of China (PBOC) on Sunday, Mastercard will have the authority to issue bank cards denominated in Chinese yuan under its own brand.
China is a predominantly cashless society, with yearly electronic transactions amounting to $434 trillion. The dominant digital wallets in the country are Alipay and WeChat Pay, owned by the tech giants Alibaba and Tencent, respectively. These two platforms together hold a market share of 91%.
After more than three years, regulators have finally given the approval for Mastercard (MA) and NUCC to establish a domestic bank card clearing institution. This information was stated in a release from Mastercard, headquartered in New York.
On November 15, 2023, Xi Jinping, the leader of China, delivered a speech during a dinner hosted by the National Committee on US-China Relations and the US-China Business Council in San Francisco, in conjunction with the APEC summit.
Carlos Barria/Pool/Reuters
China is willing to be a partner and friend of the US, Xi tells American CEOs
Chinese leader Xi Jinping and US President Joe Biden held significant discussions in the San Francisco Bay Area on Wednesday. Following the talks, Xi had a dinner meeting with American business leaders, during which he expressed China's willingness to serve as "a partner and a friend" to the United States.
Mastercard CEO Michael Miebach described the approval as a significant milestone while participating in a CEO summit held on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum. The summit saw the presence of various leaders, such as Xi and Tesla CEO Elon Musk, along with Apple CEO Tim Cook.
The Chinese state media portrayed the move as evidence of the country's ongoing commitment to economic liberalization.
Mastercard, like other international payment providers, has been advocating for years to broaden its operations in China. Previously, it was solely permitted to issue co-branded cards, like those in partnership with China UnionPay, the government-owned card network.
The Alipay logo is displayed at the Shanghai office of Alipay, which is owned by Ant Group, an affiliate of the Chinese e-commerce giant Alibaba. This photo was taken during the coronavirus disease (COVID-19) outbreak in Shanghai, China on September 14, 2020.
Aly Song/Reuters
Visa and Mastercard can now be used on Chinas biggest payment apps
The transactions were conducted through the UnionPay network for yuan payments within mainland China, and through Mastercard's network for US dollar payments made abroad. With the introduction of direct market access, Mastercard now has the ability to process a greater number of transactions and earn fees from them.
Mastercard is the second foreign company to be granted direct market access, following in the footsteps of American Express, which obtained its license in 2020. American Express then introduced its initial debit cards for yuan transactions one year later.
Visa (V) has applied for a license to issue its own cards in May 2020. However, the company stated in its recent annual report that it is still awaiting approval and has not received any indications regarding the timing. This report includes contributions from CNN's Nectar Gan.
