Outbound travel market may be best bet for Visa, Mastercard should they finally gain access to China
- For the past two decades, Mastercard and Visa have long sought to enter China’s huge yuan card payments market, but Beijing has been reluctant to let them in
While “cash or card?” is the usual question when standing at a cashier’s till in the west – in China the answer is neither.
Visa and MasterCard, the world’s leading credit card companies accepted in over 200 countries, may eventually enter China after a 20-year wait as part of a potential US-China trade deal.
But China’s transition towards a cashless and cardless society, with nine out of 10 internet users already paying for things with smartphones, means the card giants will likely look to work with the country’s dominant mobile payments providers in key segments, such as outbound tourism.
“Visa and Mastercard won’t be able to change the payment culture that Chinese consumers have formed in the past decade. They have missed the golden era,” said Wang Pengbo, an analyst at Chinese internet consultancy Analysys.
“It will be a rather long process for Visa and Mastercard to establish business partnerships in China, and systems capable of handling huge transaction volumes, all in compliance with Chinese regulations.”
For the past two decades, Mastercard and Visa have long sought to enter China’s huge yuan card payments market, but Beijing has been reluctant to let them in. Access to China’s electronic payments market for Visa and Mastercard was one of 10 points agreed to between the US and China after the first Trump-Xi summit in April 2017, and in recent US-China trade talks it has been reported that China is still open to this idea as part of an overall trade agreement.