Mobile Payments Titan Mastercard Makes New Moves in China
While right now, pretty much all of the focus on China is related to the ongoing disaster that is the coronavirus ,there’s more going on than potentially lethal diseases. Mastercard actually tipped us off about one recent development between itself and NetsUnion, along with the People’s Bank of China, to enter China and establish a bankcard clearing institution therein.
The new joint venture is still in the earliest stages, and looks to draw on the various synergies between Mastercard and NetsUnion to provide an improved payments experience for the Chinese populace. Since China is significantly ahead of the game when it comes to digital payments—particularly mobile payments to match the level of smartphone saturation in the region—Mastercard and NetsUnion looked to get in on the brisker business. This especially makes sense given that the Chinese have something of a cultural aversion to credit cards, Mastercard’s primary business.
The new operation is expected to take about a year to put fully in place, and by then, the combined operation will be able to petition the People’s Bank of China for formal approval to begin its operations.
Mastercard’s president and CEO Ajay Banga noted “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.”
Hopefully by the time that first year has expired, Mastercard and NetsUnion will be able to work with a Chinese populace that isn’t in semi-permanent hiding from the coronavirus. Still, it’s a worthwhile idea; there’s not much chance of Mastercard getting in on China’s credit card trade, because China’s credit card trade is virtually nonexistent. However, serving as a bridge to connect banks to mobile payments tools, that’s a system the Chinese have been going for in huge numbers, and will likely continue to do so for some time.
It’s going to be a long while until we find out how well this worked, but in the meantime, there’s a lot of setup to do. China is one major market, and reaching all those potential customers will take time and marketing in no small measures to proceed.