The United States accuses China in a trade dispute, to prefer domestic companies. The market for credit cards that shows how the government in Beijing is closed sectors to foreign companies.

A small coffee Shop in Shanghai city Jing’an district: mainly business people from the surrounding drinking high-rise offices, their breaks-coffee. A Cappuccino costs-cost 15 Kuai, just under two Euro.

As everywhere in China, all the pay most of the customers with the Smartphone. Anyone who tries it with a credit card, fails. Unfortunately, we have no device for foreign credit cards, says the coffee seller.

Small businesses do not accept foreign credit cards

International payment service Apple pay in China so far barely common. The two US companies Mastercard and Visa have been trying for years in vain to make on your own in the most populous country in the world shops.

Large Hotels and expensive Restaurants do not accept even now, foreign cards, as not to scare business travelers. But this only works via a complex and costly partnership with the local provider UnionPay. Smaller establishments accept foreign cards almost never.

a monopoly in the state

UnionPay is state-owned and has a monopoly in China.

The card provider UnionPay is owned by the Chinese state. He has a country-wide monopoly. And China’s state and party leadership have no interest to change anything, says Oliver Rui of the China Europe International Business School (CEIBS).

“first of all, the technical reasons for this. China’s currency, the Renminbi, is not freely convertible, exchangeable,” says Rui. “The big question is: How would China-free capital market with an open credit card market tolerate? How the money would work abroad, is unclear. And the second reason is that China wants to protect its state-owned companies and also can not give up therefore, the monopoly of UnionPay.”

applications will not be accepted for decision-making

The WTO dam in 2012, values in China about the discrimination of foreign payment service providers.

The Spicy fact: The world trade organization (WTO), complained in 2012 that China kidney international payment service provider discrimination. The state and party leadership vowed to improve and promised to open up the market for Mastercard, Visa and others. They also brought new rules on the way. But really, hardly anything has happened since.

2017 requested Visa and Mastercard in the case of the Chinese Central Bank authorisation. However, according to media reports, this took the requests never officially for a decision. Instead, the Chinese authorities keep the US financial companies.

“That’s pretty embarrassing,” says the Shanghai Economics Professor Rui, “because China has already in 2001, at the entry into the WTO and promised to open its financial market. And the rules say just: If the authorities accept applications from credit card companies, you need to edit this also. But the government does not know yet, whether or not you want to, at all, that’s why the delaying tactics.”

American Express accepted partnership

The small US credit card provider American Express has in the meantime found a way out. He got in November, as the first foreign card provider, permission to be active in China. American Express agreed but a partnership with a local financial company. Mastercard and Visa insist, alone, without a Joint-Venture Partner in China to get started. So far, in vain.

How Mastercard and Visa (in vain) EMS business in China
Steffen root, ARD Shanghai
25.02.2019 09:26 PM

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