What’s new: Mastercard has gotten approval to run a yuan-denominated bank card clearing service in China through a joint venture (JV), the central bank said, giving the U.S.-based company a shot at a slice of the fees generated by the trillions of dollars in card transactions made in the country each year.
The People’s Bank of China (PBOC) granted the clearing license to Mastercard NUCC Information Technology (Beijing) Co. Ltd., a JV between Mastercard and NetsUnion Clearing Corp. (NUCC), according to a PBOC statement on Sunday.
NUCC is a clearinghouse for online transactions by non-bank payment institutions, such as Alipay and WeChat Pay.
With the license, the JV can authorize its member institutions to issue Mastercard-branded yuan-denominated bank cards in China, the statement said.
The background: The approval marks the second time a Chinese-foreign JV has been allowed to get into the business long monopolized by UnionPay. The first was Express (Hangzhou) Technology Services Co. Ltd. — a joint venture between American Express Co. and LianLian DigiTech Co. Ltd. — which received its clearing license in 2020.
Mastercard’s application for a bank card clearing license, first submitted in 2017, was withdrawn the following year. In 2020, the company received an in-principle approval to begin formal preparations to set up a domestic bank card clearing institution in China.
Last year, China’s bank card transactions totaled 1.01 quadrillion yuan ($141 trillion), according to PBOC data.
Contact reporter Qing Na (qingna@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
Get our weekly free Must-Read newsletter.
