Mastercard Eyes License as China Opens to Outside Payment Firms
Mastercard is setting its sights on China, with plans to apply for a payment services license there and releasing a new index to track the pulse of the nation’s new economy. China began allowing foreign-based payment card providers to operate in the country in June, giving outside players the opportunity to access the country’s $8.25 trillion payments market—provided they met certain capital and security standards. Mastercard currently is studying the requirements and deciding whether to apply for a license alone or with a partner, according to a report from Reuters. The network hopes to deliver its application to China’s central bank by the end of this year, Ling Hai, Mastercard’s co-president for Asia-Pacific, told Reuters. Once the application is submitted, the bank has 90 days to decide whether or not to grant the license.
Mastercard and Visa long have coveted direct access to China’s payment cards market, which is projected to become the world’s largest by 2020 and currently is dominated by state-run UnionPay. Those aspirations moved much closer to reality in early June, when the People’s Bank of China announced it would begin allowing foreign payment and fintech companies to enter the market over the coming years.
Meanwhile, Mastercard has launched a new index that will track the performance of the Chinese economy. The Mastercard Caixin BBD China New Economy Index will evaluate nine industries that embody China’s “new economy,” including biotechnology, new energy and financial services, to determine what percentage of all economic input came from new economy industries for a given month. Operated in partnership with media group Caixin and business analytics firm BBD, the index will be released on the second day of each month.