Mastercard Renews Effort to Enter Chinese Market – WSJ (paywall)
What happened: American credit card company Mastercard is partnering with Chinese online payment clearing house, NetsUnion Clearing Corp or Wanglian, a company with close ties to the regulator in charge of approving credit card businesses. Mastercard plans to hold a majority stake in the new joint venture, though no formal agreement has yet been signed.
Mastercard will reportedly refile its application to set up a card-clearing service in the country with the People’s Bank of China after establishing the JV.
Why it’s important: Mastercard has seen little progress in its attempts over the past several years to crack the vast transaction clearing market in China, known for of discriminating against foreign credit card companies. Its smaller rival, American Express, took a similar route and won approval to set up card-clearing services as a JV with a Chinese fintech firm in November.
The entrance of Mastercard would channel more competition to China’s online payment clearing market, which is currently dominated by China UnionPay and online payment platforms like Ant Financial’s Alipay and Tencent’s TenPay.
NetsUnion, launched in 2017, is supervised and partially owned by Central bank-affiliated institutions.