MasterCard to apply for payment licence in China
MasterCard plans to become a payment service provider in China, according to Reuters. It is still pondering whether to do so alone or with a partner, it is understood.
Ann Cairns, president of international markets at MasterCard, told Reuters that China is “pretty crucial” to MasterCard’s future, but the company is still “trying to understand the rules”. MasterCard would like to enter China as soon as possible and is already in the process of devising a business plan, Carins said.
The company hopes to be in a position to submit a licence application this year. However, Ling Hai, co-president for Asia-Pacific at MasterCard, commented that there were no guarantees. “There is so much uncertainty and variability in the process,” Hai told Reuters.
The Chinese government has recently opened up the market to international providers – giving the likes of Visa and MasterCard the opportunity to tap into a CNY 55 trillion ($8.4 trillion) card payment industry.
The two companies have been lobbying for more than a decade for direct access to China’s cards market, projected to become the world’s biggest by 2020. The market is currently dominated by China’s own state-run entity, UnionPay.
Under the new rules, a foreign company must meet the national security and cyber security standards to be able to operate in China. Also, the company must hold CNY 1 billion ($150 million) in registered capital in a local entity.
Elsewhere, MasterCard is splashing out $920 million on the UK’s major payments software and services provider, VocaLink. The acquisition will allow MasterCard to “play a more strategic role in the UK payments ecosystem”, it says.
It also facing a £19 billion lawsuit – the biggest in UK legal history – in a collective action over card charges that were passed on to shoppers.
Another major development is a brand new logo and identity unveiled by MasterCard a week ago — the first change in 20 years.
The latest issue of Banking Technology examines the digital payments landscape of China – click here to read the free digital edition of the magazine.