In a landmark move, Mastercard, the renowned US-based card giant, has initiated domestic payments processing in China through a strategic joint venture.
This week marks the inauguration of the Mastercard NetsUnion JV, signaling the commencement of processing payments within China made using Mastercard cards issued by local banks. Moreover, Mastercard-branded cards will now be universally accepted for both domestic transactions and international purchases.
Michael Miebach, CEO of Mastercard, expressed enthusiasm about the partnership, stating, “With our local partner NUCC, our goal is to simplify the payments experience for China’s Mastercard cardholders both at home and overseas.”
The journey for foreign card schemes to penetrate China’s colossal payments market has been arduous. Since June 2015, when China eased restrictions on overseas firms obtaining licenses, Mastercard has been strategically positioning itself. Establishing a majority-owned joint venture with NetsUnion Clearing Corporation (NUCC) was a pivotal move.
Formal preparations for setting up a domestic bank card clearing institution began in February 2020 when the People’s Bank of China primarily approved the application from Mastercard NUCC. Since then, the joint venture has diligently adhered to local regulatory requirements, establishing standards, rules, structures, and infrastructure. Obtaining the necessary certificates for a local switch business was a significant milestone.
Last year, formal approval from the People’s Bank of China and the National Administration of Financial Regulation paved the way for the commencement of domestic bank card clearing activity, leading to this week’s groundbreaking advancement.
Ling Hai, chairman of Mastercard NetsUnion, emphasized the venture’s commitment to enhancing consumer and business experiences across China. “To offer more choice and deliver greater value for Chinese consumers and businesses of all sizes, we will expand the availability of Mastercard-branded products, facilitate the addition of millions of new acceptance locations across the country, and deliver seamless and safe payments experiences every day,” stated Ling Hai.
The initiation of domestic payments processing in China represents a significant stride for Mastercard in its quest to offer inclusive and convenient payment solutions worldwide. This strategic partnership promises to redefine the payment landscape in one of the world’s largest economies, benefitting consumers and businesses alike.
