Mastercard has gained access to the lucrative Chinese market after it was given approval from the People’s Bank of China (PBOC).
It means the bank will commence with the formation of its strategy for a domestic bankcard clearing institution in the region.
PBOC also outlined that the preparations will need to be completed within a year for Mastercard’s expansion into China.
Completing the expansion, Mastercard will require full approval once again from the PBOC for its strategy and preparations within the country.
Ajay Banga, president and CEO for Mastercard, stated: “We are delighted and encouraged by this latest decision from the PBOC. China is a vital market for us and we have reiterated our unwavering commitment to helping drive a safer, more inclusive and seamless payments ecosystem for Chinese consumers and businesses. We remain focused on working with the Chinese government and local partners to grow the overall payments infrastructure.”
China is a fruitful market for Mastercard, a firm that has long lobbied for entry into the region alongside a plethora of other financial companies.
According to Bloomberg, there were 8.2 billion bank cards in circulation in China at the end of September and 90% of them were debit cards, a fact that affirms the significance of the market.
Expert Analysis: Whilst it potentially holds exponential benefits, successful entry into the market will be seen as something of a challenge to the big financial companies, with the structure and ecosystem in the region already well trusted and established.