U.S. payment company Mastercard's Chinese joint venture (JV) opened for business on May 9, after the People's Bank of China (PBOC) approved the launch of bank card clearing operations in November 2023. Mastercard thereby becomes the second overseas bank card clearing institution to enter the Chinese market, after American Express in 2020, which industry analysts said demonstrates the country's determination to open wider to the outside world in the financial sector. The move is conducive to promoting a more open and internationalized development of China's payment and clearing services, providing diversified and differentiated services for all parties in finance, as well as deepening the supply-side structural reform of the payment industry, analysts noted.
In 2023, China's central bank and the National Financial Regulatory Administration approved an application by Mastercard NetsUnion Information Technology (Beijing) Co, a JV between Mastercard and NetsUnion Clearing Corp, to conduct bank card clearing operations in the country. According to Mastercard's website, its Chinese JV has begun processing payments made in China with Mastercard cards issued by the country's banks. In addition, the JV confirmed that Mastercard-branded cards will now be accepted for both domestic and international purchases.
“This is another significant milestone for Mastercard. Our goal is to simplify the payment experience for China's Mastercard cardholders both at home and overseas,” Michael Miebach, CEO of Mastercard, said in a statement sent to the Global Times. “To offer more choices 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 every day,” said Ling Hai, Chairman of the Board of Mastercard NetsUnion and President of Asia Pacific, Europe, Middle East & Africa for Mastercard.
“The establishment of JV clearing agencies is a notable sign of the opening-up of the financial market. It has not only allowed the entry of foreign capital, but also facilitated exchanges of technology and knowledge, all of which are direct results of the opening-up policy,” said Wang Peng, Associate Research Fellow at the Beijing Academy of Social Sciences. The move is also an important step in the internationalization of China's financial market, as cooperation with internationally recognized financial institutions helps the country's banking industry introduce advanced technology and management practices.
Vice Minister of Commerce Guo Tingting announced that around 12,000 foreign-invested enterprises were established in the first quarter of this year, an increase of 20.7% year-on-year, maintaining the rapid growth of last year, the Global Times reports.
