MasterCard has been approved by Chinese Bank of China to start clearing its bank card in China, opening up the potential for Apple Card, Apple’s own brand, to expand in China,media outlet Apple Insider reported. Bloomberg reported Tuesday, citing an official notice, that MasterCard’s application has been approved.
China has long maintained China UnionPay as its state monopoly to handle all bank card clearing and other financial services. However, China launched a program in 2015 that allows foreign companies to apply for licenses and do business there.
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, which is now estimated to exceed Rmb129, 000bn a year.
Card issuers complain that barriers to entry to China have hampered 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. It is also becoming increasingly popular for payment using barcodes or NFC bank-related applications.
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, China, each with different independences. When China will allow Apple to unleash Apple Pay’s full potential in mainland China remains to be seen.
Apple has been approved to use the system’s transportation cards in Beijing and Shanghai using the Apple Pay Express Transit. With unionPay accounts set up, Apple Pay can also be used in public transport systems in Guangzhou and Hangzhou.
If Apple Pay can get full approval in China, MasterCard’s liquidation approval should also allow Apple to launch Apple Card and its innovative Wallet integration service in China.
Apple Card and the Apple Pay Cash service, which supports free payments between individuals, are currently only available to users who have an account in the United States. However, Americans with Apple Card can use it anywhere they can use for Apple Pay NFC contactless transactions, or they can use it anywhere they accept a major credit card from their actual MasterCard.