US card giant Mastercard, through a joint venture, has begun processing domestic payments in China.
This week, the Mastercard NetsUnion joint venture started processing payments made in China with Mastercard cards issued by local banks. Additionally, Mastercard-branded cards are now accepted for both domestic and international purchases.
Michael Miebach, CEO of Mastercard, stated: “With our local partner NUCC, our aim is to simplify the payments experience for China’s Mastercard cardholders both at home and abroad.”
The entry of foreign card schemes into China’s multi-trillion-dollar payments market has historically faced challenges. In June 2015, the country eased restrictions on foreign firms obtaining licenses by establishing local units or acquiring domestic companies.
At that time, Mastercard formed a majority-owned joint venture with NetsUnion Clearing Corporation (NUCC). In February 2020, the People’s Bank of China approved the Mastercard NUCC application to begin the establishment of a domestic bankcard clearing institution.
Since then, the joint venture has developed standards, rules, structures, and infrastructure in compliance with local regulations and acquired the necessary certificates for local switch operations.
Last year, the venture received formal authorization from the PBOC and the National Administration of Financial Regulation to start domestic bankcard clearing activities, leading to the launch this week.
Ling Hai, chairman of Mastercard NetsUnion, noted: “To provide more choices and deliver greater value for Chinese consumers and businesses of all sizes, we will increase the availability of Mastercard-branded products, facilitate the addition of millions of new acceptance locations across the country, and ensure seamless and secure payment experiences every day.”