Mastercard May Seek Payment Licensing In China

Mastercard is mulling an entrance into the China market and could get its application in during 2016 to become a payment provider in what is expected to be the largest market by 2020.

Ann Cairns, president of international markets, said in an interview with Reuters that China is extremely important to the future of the company and that the credit card company is poring over the rules in China to see how they would impact the company’s business. While they do that, Mastercard is holding off on moving ahead.

China announced this summer that it would let non China-based payment card companies operate in the country, but they would have to follow China’s rules. That was welcome news to credit card companies, particularly U.S.-based ones that for more than a decade have been trying to break into the China market. And with good reason. China has a lot of potential customers for the credit card companies and many of them have disposable income. Earlier this summer, People’s Bank of China said bank card consumer transactions hit CNY 55 trillion last year. By opening up the market to U.S. credit card companies, it gives MasterCard and competitor Visa the potential to tap some of the $8.25 trillion card payment market.

Credit card companies that want to set up shop in China have to follow the country’s national and cybersecurity rules and law. Because of that the Mastercard executive said the company is taking the time to understand what is expected of them in China, including the new rules surrounding cyber security. Mastercard said there is no guarantee it will apply for a license this year as it is still deciding if it will enter the market on its own or look for a local partner.