Mastercard Grabs Approval to Make Preparations for Entry into Chinese Payments Market

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The Chinese central bank has given its preliminary approval to Mastercard’s entry into the domestic payment’s market via a joint venture with China’s centralised platform for the processing of online payments.

Mastercard has announced that it has obtained approval from the People’s Bank of China (PBOC) to commence formal preparations for the establishment of a joint venture that will engage in bank card clearing operations in China.

The joint venture is named Mastercard NUCC Information Technology (Beijing) Co., Ltd. (万事网联信息技术(北京)有限公司), and Mastercard’s domestic partner in the company is NetsUnion Clearing Corporation (NUCC), which is itself a joint-venture between PBOC and domestic tech giants including Alipay and Tencent.

NUCC is the op­er­a­tor of Chi­na’s na­tion­wide cen­tralised plat­form for the pro­cess­ing of on­line trans­ac­tions un­der­taken by the coun­try’s third party pay­ments providers in­volv­ing bank ac­counts.

Under the approval Mastercard NUCC Information Technology has one year to complete preparation work before applying for another approval to commence bank card clearing operations within China.

Since early 2018 Beijing has heavily touted efforts to open up China’s finance and payments sectors.

Mastercard’s US rival American Express obtained preliminary approval in 2018 to clear credit card payments, while in January PBOC accepted Amex’s application to clear and settle payments in China via its joint venture with LianLian Group.

Last October PBOC gave its ap­proval to Pay­Pal’s ac­qui­si­tion of a 70% eq­uity stake in Chi­nese pay­ments com­pany Go­Pay (国付宝), mak­ing the US pay­ments gi­ant the first for­eign-in­vested com­pany to gain ac­cess to the do­mes­tic sec­tor. 

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