Mastercard has secured the “in-principle” approval of the PBOC to begin operations in China’s electronic payments services market.
In a statement released on Monday, the company said that it was “delighted and encouraged” by the latest decision of the PBOC.
“China is a vital market for us and we have reiterated our unwavering commitment to helping drive a safer, more inclusive and seamless payments ecosystem for Chinese consumers and businesses,” said Ajay Banga, president and CEO, Mastercard.
Mastercard submitted its application to operate in China with its Joint Venture (JV) partner NUCC Information Technology (Beijing) Co., Ltd.
Why It Matters
Mastercard, along with other major US card networks, such as Visa Inc. (NYSE: V) and American Express Company (NYSE: AXP), was trying to enter the Chinese market. American Express became the first to receive preliminary approval to clear credit card payments in 2018, along with its JV partner LianLian Group.
PayPal Holdings Inc. (NASDAQ: PYPL) plans to enter China after having acquired a 70% equity stake in GoPay. It would allow PayPal to enter China’s online transactions market.
The trade deal signed between the United States and China could allow for entry of American payments firms in the Chinese markets. The deal mandates that China accept and review payment companies’ applications in a timely manner.
China has six billion cards, and the number is expected to reach 9 billion by 2020. At present, UnionPay, the Chinese card issuer, has 90% of the market share.
Mastercard shares traded 0.024% higher at $331 in the after-hours session on Tuesday. The shares had closed the regular session 0.19% higher at $330.92.
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