Skip to content

China Prevents MasterCard from Handling RMB Transactions

Xinhua recently reported on a dispute between MasterCard and the Chinese authorities on the right to handle RMB transactions. The report is based on British media reports of a document that the Chinese central bank issued  asking online payment platform EPayLinks to stop cooperating with MasterCard in conducting RMB business. About a year ago, the World Trade Organization (WTO) ruled that the Chinese government’s protection of the monopoly power of UnionPay, China’s bankcard association, in RMB credit card transactions broke the WTO agreement. Since that ruling, the Chinese central bank has not made any changes. It seems the Chinese authorities will continue to maintain a tough position on this matter. China is one of the fastest growing credit card markets in the world. China issued 46 million credit cards in 2012. According to MasterCard’s estimate, China will surpass the United States in 2020 to be the largest credit card market in the world. The Chinese RMB-based credit card monopoly, UnionPay, doubled its business volume over the past four years. EPayLinks argued in this new case that its business with MasterCard did not break any Chinese law since all operations are handled by the Hong Kong branch.
Source: Xinhua, June 3, 2013