Both Visa and Mastercard posted solid fourth quarter earnings and outperformed analyst estimates, yet the companies are still waiting for approval to do business in China. Though it’s been more than a year since each submitted applications to process payments in the US$124 trillion market, the People’s Bank of China (PBoC) hasn’t acknowledged and accepted the applications. Once it does, the bank has 90 days to finalize a decision.
While rules introduced in 2017 were supposed to make it easier for foreign entities to enter the country, many companies believe China is using informal barriers to keep them at bay. The failure to formally accept applications from two of the biggest credit card brands in the world seems to be proof of that.
So far, American Express (Amex) has been the only foreign company to receive approval to open up card-clearing services in China—but only after it formed a joint venture with Lianlian Group, a Chinese FinTech company. Sources have said that China has pressured Visa and Mastercard to form similar partnerships.
During a call with analysts on January 30, Visa CEO Al Kelly said, “We continue to work closely with the Chinese regulators and government to understand how to best proceed through the application premises,” according to Quartz.
In the meantime, Visa beat expectations on double-digit payments volume growth for the last quarter of 2018, with processed transactions at around 33.9 million, an 11% increase from the previous year. In addition, payments volume came close to US$2.3 trillion, which showed 11 percent growth year over year.
Mastercard revealed continued gains in processed transactions, with gross dollar volume up 14% to US$1.5 trillion, while switched transactions came in at 20.1 billion transactions, a 17% boost year over year. Debit and prepaid transactions went up 12.2% to US$762 billion, while credit transactions increased 6.6% to US$787 billion.
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
BHP Unveils £31bn Mining Megamerger Proposal with Anglo American
Apr 25, 2024 by
nhoch@pymnts.com
ByteDance Prefers Shutdown Over Sale of TikTok Amid US Ban Threats
Apr 25, 2024 by
CPI
FCC Votes to Restore Net Neutrality Rules
Apr 25, 2024 by
nhoch@pymnts.com
Apple Rejects Spotify’s Updated App Over In-App Pricing Disclosure
Apr 25, 2024 by
CPI
FCC Set to Reinstate Net Neutrality Rules Today
Apr 25, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI