Mastercard has processed its first payments in China through Mastercard NetsUnion, a joint venture between the US payments giant and the Chinese banking network.
The JV has processed transactions in mainland China using cards issued by the country’s banks. Mastercard-branded cards will now be accepted for both domestic and international purchases.
This marks a significant moment for Mastercard, which has bolstered its foothold and visibility in the world’s second most populous country and second largest economy. According to data gathering platform Statista, the total value of digital payments transactions in China is projected to reach $3,744.00bn in 2024.
Michael Miebach, CEO of Mastercard, said: “This is another significant milestone for Mastercard. Since entering the market nearly 40 years ago, we have built strong relationships with China’s banks, merchants and fintechs to connect its people to the global economy.
“With our local partner NUCC, our goal is to simplify the payments experience for China’s Mastercard cardholders both at home and overseas.”
Building up its Chinese profile has been a key project for Mastercard over the past four years. In February 2020, the People’s Bank of China (PBOC), the country’s central bank, granted Mastercard NetsUnion principal approval to begin preparing for a domestic bankcard clearing institution.
The firm then began establishing structures, standards, rules and infrastructure in line with Chinese regulatory requirements. This led to Mastercard NetsUnion receiving approval from the PBOC and the National Administration of Financial Regulation (NAFR) to begin domestic bankcard clearing activity in November 2023.
Mastercard is no stranger to Chinese payments, however. The firm’s services have been available to international visitors to the Chinese mainland for several decades, and were bolstered by the introduction of its ‘Pay Like a Local’ programme last June.
As well as working with the central bank Mastercad has also been tapping into China’s extensive private sector. Just two months ago the company entered a cross-border payments partnership with digital payment platform Alipay, part of the Ant Group.
Ling Hai, Chairman of the Board of Mastercard NetsUnion and President of Asia Pacific, Europe, Middle East & Africa for Mastercard, remarked: “As our digital doors officially open for business, Mastercard and Mastercard NetsUnion are committed to working with all partners in China to build a secure, trusted and resilient digital ecosystem that encourages innovation.
“To offer more choice and deliver greater value for Chinese consumers and businesses of all sizes, we will expand the availability of Mastercard-branded products, facilitate the addition of millions of new acceptance locations across the country, and deliver seamless and safe payments experiences every day.”
