Mastercard has received in-principle approval from the People’s Bank of China (PBOC) to begin preparations towards setting up a domestic bank card clearing institution in China.
Mastercard has been trying to get into the Chinese payments market for some years, keen to capitalise on a market worth more than $27 trillion.
In 2019 The Wall Street Journal reported that Mastercard had set up a joint venture with NetsUnion Clearing Corporation, a Chinese clearing house with ties to the PBOC.
With the joint venture in place, Mastercard refiled its application to the PBOC under the name Mastercard NUCC Information Technology.
Within one year, the company will be able to apply to the People’s Bank of China for formal approval to begin domestic bankcard clearing activity.
“We are delighted and encouraged by this latest decision from the PBOC,” says Ajay Banga, president and CEO of Mastercard.
“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.
“We remain focused on working with the Chinese government and local partners to grow the overall payments infrastructure.”
According to Mastercard the collaboration between itself and NUCC is “founded on mutual synergies” and will “drive a simple, safe and smart payments experience”.
Last month Mastercard confirmed its acquisition of AI-based firm RiskRecon. Terms of the agreement were not disclosed. The transaction, which is anticipated to close in the first quarter of 2020, is subject to customary closing conditions.