MasterCard Looking To Break Into China’s Financial Market
MasterCard Inc. will apply to become one of China’s payment service providers after its government opened the market. However, the company is still deciding if it should go it alone or partner up.
According to International Markets President Ann Cairns, MasterCard has studied the country’s rules to determine how it would affect the business and is still in the process of developing a business plan. She said China is important to the company’s future.
In June, China opened its doors to foreign payment card companies to work in the country but under its new rules, which could let companies such as Visa Inc. and MasterCard work in the $8.25 trillion card payment market.
According to the rules, companies must meet both the cyber security and national security standards that have been laid out. They need to have at least one billion yuan in registered capital with a local company.
Cairns said the company is trying to understand China’s rules, but that the company would like to enter the China market as quickly as it can. She said certain things must be understood to learn how they’re going to operate.
MasterCard and Visa are the world’s two leading debit and credit card companies, and for more than a decade, they have lobbied to have direct access to the Chinese card market.
Ling-Hai, Asia-Pacific co-president, said he was hopeful MasterCard could potentially submit a license application in 2016. He said there're no guarantees because of the uncertainty in the process – it could take up to two years.
Cairns said MasterCard is not jumping into the market lightly, waiting on the business model and see what local partner it wants to work with. She said the security standards and capital requirements were not obstacles for MasterCard. Cairns said MasterCard has never had pressure to partner up in China.