Late to the party
The number of foreign players in China's bank card clearing sector just doubled – to two.
On Friday, regulators granted Mastercard's Chinese joint venture (JV) a license to conduct RMB clearing operations in China.
- That makes Mastercard the second foreign entity to get such a license, after American Express’s China JV got the go-ahead in 2020.
In practice, the license means Mastercard’s JV can now issue Mastercard-branded RMB-denominated bank cards in China.
Get smart: The three-year gap between granting the first and the second license indicates that political considerations were behind the long wait.
- Mastercard's approval comes on the heels of Wednesday's Xi-Biden summit – which likely helped clear the remaining hurdles.
Our take: The license is mostly symbolic.
- We can't see this being a massive commercial boon for Mastercard, considering the dominance of China's domestic champion, UnionPay.
sources
Xinhua: 中国人民银行向万事网联公司核发银行卡清算业务许可证
The Paper: 中国人民银行向万事网联公司核发银行卡清算业务许可证