- Mastercard got approval to enter the Chinese domestic market
- It is a multi-million dollar business in a market of potential transactions for US $ 27 billion
- Visa and American Express are waiting for the same authorization from the People’s Bank of China
“China is a vital market for us,” Seth Eisen , vice president and head of communications at Mastercard , said in mid-January . “We are doing everything possible to ensure we get the necessary license to operate in China nationwide,” he added.
Today, almost a month later, there will surely be great celebrations on Mastercard, because after years he obtained approval to establish the core of his bank card business in China, thus obtaining access to an estimated payment market of US $ 27 billion, according to Bloomberg .
That’s right, NetsUnion Clearing Corp , the company based on the Asian giant that controls Mastercard, needed to complete a series of requirements that now, according to the People’s Bank of China, are already approved.
China is opening its financial markets to allow foreign companies to establish their own operations to manage insurance, asset management and investment banking businesses.
Visa and American Express are also making progress with their own authorizations, which are also expected to prosper, all within the framework of the agreements to finish unlocking the so-called trade war between the United States and China.
They will not start from nothing in the country of Xi Jinping. The big American card operators have been working with their brands for a long time with Chinese banks, but so far, only for transactions that Asian consumers carry out outside that country.
The novelty is that now the networks will also have the opportunity to compete for the internal spending of the owners of those cards.
Until now, that huge market was mainly in the hands of a single player, China UnionPay, a state company.
China has 8,200 million bank cards in circulation, according to Statista, 90 percent of them, debit.
MasterCard and Visa reach a market where mobile payments are increasingly being promoted by the great local players : Alipay from Ant Financial and WeChat Pay from Tencent Holdings, the two dominant firms in that segment.
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This will not be free. As part of the agreement, the United States promised not to discriminate against China UnionPay and other Chinese electronic payment services in its own territory.
PayPal has already entered China. The US company was the first foreign company to obtain a mobile payment license in the Asian giant in January 2020 after years of promises from Beijing.
He did it with the acquisition of Guofubao ( NationPay ), a small Chinese online payment company.