MasterCard has been approved by Chinese Bank of China to start bank card clearing in China, opening the way for Apple to expand its own-brand Apple Card business in China. A Bloomberg report cited an official notice that MasterCard’s application was approved today.
China has long maintained China UnionPay as its state monopoly to handle all bank card clearing and other financial services. However, the country launched a scheme in 2015 to allow foreign companies to apply for permits and operate locally within the country.
MasterCard, Visa and American Express have all applied to set up bank card clearing services in China, which will allow them to start issuing cards and processing transactions with merchants in the world’s largest mobile payment market, with annual transactions now estimated at more than Rmb1.29 trillion ($27 trillion).
Card issuers complain that barriers to entry to the Chinese market have delayed their ability to enter the market as domestic companies thrive. China currently has 8.2 billion bank cards in circulation, 90 percent of them debit cards, the report said. Payments using barcodes or NFC-related applications are also becoming increasingly popular.
Apple has enabled Apple Pay for users in mainland China, but only through the web via Safari on iPhones and iPads running iOS 11.2 or later. Standard Apple Pay works in Hong Kong, Taiwan and Macau in mainland China, each with different independences. When China will allow Apple to unleash Apple Pay’s full potential in mainland China remains to be seen.