There is another new example of China's expansion of financial industry opening up to the outside world.
On November 19th, according to information on the official website of the People's Bank of China, the People's Bank of China, in conjunction with the State Administration of Financial Supervision and Administration, reviewed and approved the application for the opening of a bank card clearing institution submitted by "Wanshi Wanglian Information Technology (Beijing) Co., Ltd." (hereinafter referred to as "Wanshi Wanglian Company").
On November 17th, the People's Bank of China issued a bank card clearing business license to Wanshi Online Company. Wanshi Wanglian Company is a joint venture established by MasterCard and Wanglian Clearing Co., Ltd. in China. After obtaining administrative permission, Wanshi Online Company can authorize its member institutions to issue and accept RMB bank cards of the "MasterCard" brand within China.
This is the second joint venture bank card clearing institution in China to obtain a bank card clearing business license after connecting the company in 2020.
MasterCard: Supports cardholders to consume at over 100 million merchants both domestically and internationally
Wanshi Wanglian Company was registered and established in 2019, with a registered capital of 1 billion yuan. In terms of shareholders, NetEase Clearing Company holds 49% of the shares through NetEase Technology Co., Ltd., and MasterCard affiliated companies hold a total of 51% of the shares. Within 6 months after obtaining the license, the company will expand its member institutions in China, authorizing the issuance and acceptance of Mastercard brand bank cards.
Zheng Xiaofei, CEO of Wanshi Netcom, stated that the company will soon launch MasterCard RMB cards to the market, establish an omnichannel acquiring network, and support cardholders to consume more than 100 million merchants both domestically and internationally, achieving the goal of "one card for the world".
Bank cards are the most widely used non cash payment tool for individuals in China, and the proportion of bank card consumption in the total retail sales of consumer goods in society continues to grow. According to the overall operation of the payment system in the second quarter of 2023 released by the People's Bank of China, as of the end of the second quarter of this year, a total of 9.621 billion bank cards have been opened nationwide. In the second quarter of this year alone, a total of 127.397 billion bank card transactions occurred nationwide, with a total amount of 271.76 trillion yuan, a year-on-year increase of 18.07% and 11.35%, respectively.
The bank card clearing business includes a large amount of financial information from cardholders, merchants, acquirers, and issuers, involving significant public interests. In the development of the bank card industry, bank card clearing institutions play a core role in promoting the standardization of bank card services, mediating and coordinating the interests of all parties, achieving the large-scale issuance and widespread acceptance of bank cards, and improving the efficiency of bank card transaction processing and fund settlement.
Thank you to regulatory agencies such as the People's Bank of China and the State Administration of Financial Supervision and Administration for their recognition, which has enabled MasterCard to make a difference in China's bank card clearing business, "said Ling Hai, Chairman of MasterCard and Co President of MasterCard International, Wanshi Netcom will be committed to providing top-notch innovative payment solutions for consumers, member institutions, merchants, the public sector, and all partners. We look forward to working with regulatory agencies and industry colleagues to contribute to the development of China's payment ecosystem
Michael Miebach, CEO of MasterCard, said, "China is one of the most important markets for MasterCard, and we are encouraged to collaborate with our Chinese partner, Internet clearing companies, to conduct local business in China. MasterCard's deeper participation in the Chinese market will help China's high-quality development, further promote the inclusive digital economy to benefit everyone, and unlock more 'priceless' opportunities
NetEase Clearing Company stated that under the guidance and support of regulatory agencies, it will continue to support the various work of Wanshi NetEase after its licensing and opening, and assist Wanshi NetEase in providing consumers with high-level payment solutions.
Two joint venture institutions obtained licenses
At present, there are two joint venture licensed institutions in China's bank card clearing business.
In June 2020, the People's Bank of China issued a bank card clearing business license to "Connected (Hangzhou) Technology Services Co., Ltd." (hereinafter referred to as Connected Company). Connected Company is a joint venture initiated and established by American Express in China. After obtaining permission, it expands its member institutions, authorizes the issuance and acceptance of "American Express" brand bank cards in China.
In fact, since the 1980s, overseas bank card clearing institutions have been participating in the Chinese bank card market through foreign currency bank card clearing services. For example, institutions such as Visa and Mastercard in the United States have established representative offices in China for nearly 20 years, and widely participate in the Chinese bank card market through domestic commercial banks and non-financial payment institutions.
In order to further deepen financial reform and improve the marketization mechanism of payment services, the State Council issued the "Decision on Implementing Access Management for Bank Card Clearing Institutions" in April 2015, which decided to fully open China's bank card clearing market and implement market access management for bank card clearing institutions.
The first company in China to obtain a bank card clearing business license is China UnionPay Co., Ltd. (hereinafter referred to as "China UnionPay").
In March 2002, China UnionPay was established, specializing in the construction and operation of a nationwide unified bank card transaction processing and fund clearing system. Since its establishment, China UnionPay has established infrastructure such as UnionPay card clearing standards, business rules, and transaction processing systems, created a bank card clearing brand, and promoted the leapfrog development of China's bank card industry. The transaction scope of "UnionPay card" covers consumer transactions, daily payment, transfer and remittance, outbound tourism, and is closely related to residents' daily lives.
According to the overall operation of the payment system in the second quarter of 2023 released by the People's Bank of China, the business volume of the UnionPay interbank payment system has maintained growth. In the second quarter of this year, the UnionPay interbank payment system processed 76.83 billion transactions, with a total amount of 7.098 trillion yuan, a year-on-year increase of 24.73% and 15.02%, respectively. The daily average processing business reached 844 million transactions, with a total amount of 779.955 billion yuan.
According to industry perspectives, the current joint ventures of Lianhe Company and Wanshi Netcom Company, which have obtained licenses for bank card clearing business, are a reflection of China's expansion of the financial industry's opening up to the outside world and deepening of financial supply side reform. They are conducive to improving China's payment clearing service level and RMB internationalization, providing diversified and differentiated payment services for financial consumers.