Foreign card schemes that are already present in China are mainly issued in collaboration with UnionPay
Chinese payment market to approve foreign firms. Source: shutterstock.com
China is gradually opening up its card payments market for international operators, according to GlobalData. The country has the world’s largest card payments market, in terms of payment value, accounting for $16.5 trillion in 2019.
In 2012, the World Trade Organization (WTO) directed the Chinese government to open up its payment card market to foreign competitors, however, it didn’t result in any progress.
Nevertheless, in February 2020, Mastercard has received approval from the People’s Bank of China to set up a domestic bankcard clearing business in the country.
American Express became the first foreign card network to get approval from China in November 2018.? Meanwhile, Visa is also planning to set up a company in China and seeking for a clearing license.
GlobalData stated that all local transactions are processed by UnionPay while foreign schemes are only able to manage overseas transactions. However, the new licensing enables foreign schemes to process transactions locally via their own infrastructure.
The study also unveiled that the cards market is less attractive compared to the 2000s since mobile has become the dominant form of payment in China.
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