Major American Payment Processors to Enter China

Sep 17, 2015

In news that will excite American payment processors, China is for the first time allowing foreign companies to fully bring their payments processing networks to the country. This means that processors such as MasterCard and Visa can now make preparations and launch their programs in China.

In the past, it was near impossible for payment processors outside of China to do business in the country because the laws did not permit it. Consumers could use processors such as MasterCard and Visa, yes. However, you would be charged a hefty fee by a government approved company called UnionPay to process transactions. This posed a major obstacle for consumers, resulting in only a small portion of the population using such foreign payment processors. In fact, all Chinese Visas and MasterCards had to be co-branded with UnionPay.

However, China recently passed new regulations that replaced the old laws with new ones that allow external payment processors to conduct business in the country. The details of regulations remain scarce, but sources indicate that major American processors such as American Express, MasterCard, and Visa received the news with a lot of excitement.

China, with a population of more than 1 billion people, represents a huge market for any payment processor. In the past few decades, the country has been spending trillions of dollars on its own credit and debit cards with the aim of getting many people as possible to take the leap into digital payment. The initiative has been successful and the entry of bigwigs such as MasterCard and Visa can only make things better.

China is currently the world’s second-largest economy. In 2013 alone, Chinese consumers spent a whopping $5.2 trillion on UnionPay’s network. Visa handled just about $1.7 trillion more within the same period. This shows just how much companies like Visa could benefit from the new payment regulations in China.

China’s payment industry has been a sore between the two countries (the U.S. and China) for quite some time. Just three years ago, the WTO ruled that UnionPay was a government sanctioned monopoly and urged the country to provide a better environment to allow for healthy competition in the payment sector. This could be one of the major moves as the country clears the way for meaningful competition.

For retailer looking to take advantage of the new regulations by accepting more Chinese customers in the future, you need to start y getting a high risk merchant account.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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