BEIJING - Mastercard (NYSE:MA) has obtained the green light from Chinese regulators to begin bank card clearing operations in the country, marking a significant step in China's efforts to open up its financial sector to international players. The People's Bank of China (PBOC) and the National Financial Regulatory Administration approved the Mastercard NUCC joint venture's operation for Yuan-denominated bank card clearing on Sunday.
This approval allows for the issuance of Mastercard-branded cards within China, indicating a more inclusive approach by the Chinese authorities towards foreign financial services companies. Mastercard follows American Express (NYSE:AXP), which entered the market in 2020, becoming the second foreign card-clearing company to set foot in the world's second-largest economy.
The move is part of a broader strategy by China to promote a stable market environment characterized by effective competition and orderly access. By allowing Mastercard to operate in its payment industry, China is showcasing its commitment to economic openness and market growth. At the same time, it emphasizes the importance of maintaining enhanced regulatory security protocols to ensure a balance between development and security.
The entry of international entities like Mastercard into China's payment industry is expected to enhance the depth of the market, offering more choices for consumers and businesses alike. It also reflects China's pledge to foster an environment conducive to innovation and international cooperation in its financial sector.
InvestingPro Insights
Mastercard, a prominent player in the Financial Services industry, has consistently increased its earnings per share and has been profitable over the last twelve months according to InvestingPro Tips. The company's high return on assets, as well as its ability to yield high returns on invested capital, has been instrumental in its success.
InvestingPro's real-time data reveals that Mastercard, with an adjusted market cap of 375.39B USD, has a P/E ratio of 34.82, and a PEG ratio for the last twelve months as of Q3 2023 of 2.34. The company has also seen revenue growth of 12.62% for the same period.
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