Mastercard JV in China kicks off bank card clearing operations on Thursday

U.S. payment company Mastercard’s Chinese joint venture (JV) opened for business on Thursday, after the People’s Bank of China, the central bank, approved the arrangement for the bank card clearing operations in November 2023.

The opening marks Mastercard as 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 service, providing diversified and differentiated services for all parties in finance, as well as deepening the supply-side structural reform of the payment industry, the analysts noted.

China’s central bank last year announced that it and the National Financial Regulatory Administration had approved an application by Mastercard NetsUnion Information Technology (Beijing) Co, a JV between Mastercard and NetsUnion Clearing Corp (NUCC), to conduct bank card clearing operations in the country.

According to the official Mastercard website, its Chinese JV has begun processing payments done 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 payments experience for China’s Mastercard cardholders both at home and overseas,” Michael Miebach, CEO of Mastercard, was quoted in the statement sent to the Global Times on Thursday.

“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 experiences every day,” said Ling Hai, chairman of the Board of Mastercard NetsUnion and president of Asia Pacific, Europe, Middle East & Africa for Mastercard.

The NUCC reinforced its commitment to continue providing comprehensive support for Mastercard NetsUnion’s operations, under the guidance and support of Chinese regulators.

To facilitate seamless, secure payments for Chinese cardholders at home and overseas, Mastercard NetsUnion will collaborate with local acquirers to expand its acceptance network in China, further bolstering its extensive network of over 130 million acceptance locations worldwide, according to the statement.