MasterCard may apply for Chinese license before year’s end
(25 July 2016 – China) MasterCard Inc has indicated that it may apply this year to become a payment service provider in China after the government opened the market, however, it has not made a decision on going it alone or with a Chinese partner.
The credit card provider’s President of International Markets, Ann Cairns told Reuters that China is "pretty crucial" to its future, but the firm is still investigating regulations in China that would affect its business and is formulating a business plan.
Last month, China allowed foreign payment card companies to operate in the country under new rules, potentially giving global companies such as MasterCard and Visa access to its 55 trillion yuan (A$11 trillion) card payment market.
Under the rules, China's national security and cyber security standards must be met. Applicants must also hold 1 billion yuan in registered capital in a local company.
"We're trying to understand the rules," Cairns was quoted as saying, adding that MasterCard would like to enter China as soon as possible.
"Certain things inside the rules - such as the new cyber rules, which need more development and understanding about how they're going to work."
Visa and MasterCard, the world's two largest credit and debit card companies, have been lobbying for more than a decade for direct access to China's cards market, projected to become the world's biggest by 2020.
Asked if it was possible that MasterCard submits a license application this calendar year, Ling Hai, co-president for Asia-Pacific, said that was the hope but there were no guarantees.
"There is so much uncertainty and variability in the process. Something that should take one year can take two years," he said.
Bank card consumer transactions reached 55 trillion yuan in 2015, accounting for 48 percent of total social consumption, according to the People's Bank of China.
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