MasterCard Inc. and Global Payments Inc. are taking steps to expand into the lucrative Chinese market.

On Tuesday MasterCard announced a memorandum with China UnionPay, the country's sole payments network, to develop a business plan that "aims to forge a platform for potential cooperation including online and other payment areas."

Also Tuesday, Global Payments said it had gained permission to process card payments in China.

Analysts said the deals show that U.S. payments companies are gaining ground in the developing Chinese card market.

"The local card market in China is opening up a bit," Terry X. Xie, a principal analyst with Mercator Advisory Group, said in an interview Tuesday.

"China is being forced by the industry and foreign governments, including the U.S., to loosen up its tight control of the local market somewhat," Xie said.

The business development deal with China UnionPay could be significant for MasterCard, said Beth Robertson, director of payments research at Javelin Strategy and Research.

"A 'memo of understanding' sounds soft," Robertson said, "but in another way it's a strong step for MasterCard to get a position in an important market."

Global Payments said its joint venture with the Hongkong and Shanghai Banking Corp. Ltd. unit of HSBC Holdings PLC will make the Atlanta company the first foreign card processor to handle China UnionPay card transactions.

The service will initially be offered first in Beijing and Global Payments plans to expand it elsewhere in China.

Global Payments and HSBC will process domestic and foreign card transactions, enabling merchants to process Visa, MasterCard, American Express Co., JCB and China UnionPay card transactions on a single platform.

"As China's economic development continues its rapid growth, payment transactions among Chinese and foreigners traveling to China will continue to increase significantly," Paul Garcia, Global Payments' chairman and chief executive officer, said in a press release.

Neither MasterCard nor Global Payments would make executives available for comment.

Chinese trade restrictions have prevented U.S. payments companies from penetrating its local market. Meanwhile, China UnionPay, established in 2002, has grown to become the world's largest card issuer — 2.1 billion payment cards in circulation with acceptance in 92 countries.

Visa Inc. made headlines in June about a letter it sent to its banks warning them that starting Aug. 1 it would block any international transactions processed through China UnionPay, or its bank members would risk incurring fines.

Visa, which has issued dual-branded credit and debit cards with China UnionPay since 2001, said that the letter it sent to banks last summer was part of "routine communications" to banks reiterating rules that have existed for 15 years.

"Our operating regulations require that all international transactions initiated by Visa-branded cards be processed and cleared through VisaNet, which is not specific to China UnionPay or any other network," a Visa representative said.

MasterCard, of Purchase, N.Y., has been silent on the issue.

"MasterCard may have avoided criticizing China UnionPay publicly because there was an agreement in the works," Xie said.

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