MasterCard has a plan of action to become a major player in China over the coming years. The card issuer is contemplating an application to become an officially licensed payment services provider. This is rather good news, as more competition in the market will be beneficial to both retailers and consumers.
Not too long ago, the Chinese government decided to open up the payments market to international players. However, before doing so, interested parties must adhere to some strict guidelines. First and foremost, companies must meet specific cyber security rules, to ensure user funds and data is safe. Additionally, they need to hold over CNY 1bn of registered capital in a local Chinese company.
MasterCard Is Cautious But Hopeful
For MasterCard, neither of those requirements should be a hurdle. At the same time, the payment giant is considering partnering up with another player to venture into the Chinese market. With the Chinese card payment market expected to become the world’s largest by 2020, now is an opportune time to strike. For the time being, UnionPay is the entity controlling this market, but that may come to change soon.
The opportunity to venture into the Chinese market has been a long time in the making. Both Visa and MasterCard have been waiting for this chance since the late eighties. Having direct access to China’s cards market is a big deal, and will bolster either company’s position in the world.
At the time of publication, it was not certain when MasterCard would apply to become a licensed payment services provider. There are some uncertainties and variables included in the process which needs to be weighed carefully. The application could occur later this year, or it might take until 2019 to do so.
The financial world has seen some drastic changes over the past few years. Back in 2013, MasterCard was blocked from processing card transactions in China. The financial regulator at that time had imposed this ruling. Moreover, the country also has a history of discriminating against foreign card players for UnionPay.
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