MasterCard seen stealing a march on Visa as China opens doors
By Avik Das
(Reuters) - MasterCard Inc's (MA.N: Quote) strong association with Chinese bank card behemoth UnionPay is expected to help it reap more benefits than larger rival Visa Inc (V.N: Quote) as the country opens up its $7 trillion bank card payments market to foreign players.
The world's largest debit and credit card issuers have so far been barred from operating independently in the China bank card market - projected to become the world's biggest by 2020.
But that is set to change.
China's State Council said last week foreign firms would be allowed to apply to the central bank for licenses for bank card clearing businesses from June 1.
The measure is set to end a near-monopoly held by UnionPay.
It will take at least a year for foreign card issuers to start operations in China, but investor expectations are high.
Shares of MasterCard and Visa rose 4 percent in the three days following the announcement.
"It's pretty close ... but MasterCard has a little more leeway than Visa because of its existing relationship with China UnionPay," Wedbush Securities analyst Gil Luria told Reuters. Continued...