MasterCard's China joint venture for clearing operations gets PBOC nod

MasterCard has received in-principle approval from the People’s Bank of China (PBOC) to begin formal preparations to set up a domestic bank card clearing institution in China.

The Chinese central bank approved an application submitted by MasterCard NUCC Information Technology (Beijing) Co, Ltd, a joint venture of MasterCard and NetsUnion Clearing Corporation (NUCC) of China.
The approval comes weeks after China and the United States announced a formal trade deal under which China agreed to further open up its financial services sector for US investments.
“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,” Ajay Banga, president and CEO, MasterCard, said.
The strategic collaboration between MasterCard and NUCC is founded on mutual synergies, and will drive a simple, safe and smart payments experience in a market well regarded as being one of the global frontrunners in digital payments technology, MasterCard stated in its release.
The approval is another example of “China opening up its financial industry, and deepening supply-side reforms in the sector,” PBOC said in a statement on its website.
A similar application filed in January by a unit of American Express Co regarding starting operations in China and another by American card giant Visa submitted in early 2018 are still awaiting approval. 
China is opening up its local currency payments market to foreign companies after a decade of lobbying from foreign players seeking direct access to what is set to be the biggest bank card market by 2020.
MasterCard expects the joint venture to get formal approval from the People's Bank of China and begin domestic bankcard clearing activity within a year.