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Apple Card's clearing partner gains approval to operate in China

Mastercard has been approved by the People's Bank of China to begin operating its bank card clearing business in China, opening up the potential for Apple to expand its self-branded Apple Card in the country.

Apple Pay

The approval of Mastercard is one step closer for Apple Pay to gain full approval in China


A report by Bloomberg noted that Mastercard's application was approved today, citing an official notice. The PRC has long maintained China UnionPay as its state monopoly for handling all bank card clearing as well as other financial services. However, in 2015 the country initiated plans to allow foreign firms to apply for licenses and set up local operations within the country.

Mastercard, Visa, and American Express have all applied to set up bank card clearing services in China, which would allow them to begin issuing cards and processing transactions with merchants within the world's largest mobile payments market, now estimated to top 129 trillion yuan ($27 trillion) annually.

Card issuers have complained about the barriers to entry in China that have delayed their ability to enter the market as domestic firms have flourished. The report noted that China now has 8.2 billion bank cards in circulation, with 90 percent being debit cards. It has also grown popular to pay with bank-associated apps using either barcodes or NFC.

Apple has already enabled Apple Pay for users in mainland China, but it is limited to only working on the web via Safari on iPhone and iPad running iOS 11.2 or later. Standard Apple Pay works in Hong Kong, Taiwan and Macao, regions claimed as part of China that each operate with different levels of independence.

It's still unknown when or even if China will allow Apple to unlock the full potential of Apple Pay in mainland China, where the government seeks greater control over monitoring financial transactions and likely views the security of Apple Pay as a threat.

Apple has gained approval to operate Apple Pay with Express Transit in both Beijing and Shanghai using system issued transit cards. Apple Pay also works in the transit systems in Guangzhou and Hangzhou when set up with a UnionPay account.

If Apple Pay can manage to gain full approval in China, the parallel approval of Mastercard should also allow Apple to introduce Apple Card and its novel Wallet-integrated services within the country.

Apple Card, as well as the Apple Pay Cash service supporting free payments between individuals, are currently only available to users with accounts established in the United States. However, Americans with Apple Card can use it anywhere that Apple Pay NFC contactless transactions work, or via their physical Mastercard anywhere that major credit cards are accepted.