Visa, the US payment industry leader, has secured preliminary clearance to set up China’s first fully foreign-owned bank card clearing entity, representing another milestone in the opening-up of China’s financial industry.
The People’s Bank of China has greenlit Visa’s preparatory application. The firm is granted a one-year window to finish all preparatory work, after which it may submit an application for an official operating license.
Should Visa obtain the final regulatory nod, it will gain the capability to handle domestic bank card transactions within China on its own, rather than depending on China UnionPay, China’s leading card clearing operator.
Visa becomes the third global card scheme to gain access to China’s domestic clearing space. American Express got the go-ahead back in 2020, followed by Mastercard in 2023. Unlike its two rivals, which run local businesses via partnerships with Chinese firms, Visa intends to build its operation as a standalone entity.
Before officially rolling out services, Visa still needs final authorization from both the People’s Bank of China and the National Financial Regulatory Administration.
Established in 2002, China UnionPay monopolized domestic bank card clearing services until 2015, when China opened this sector to foreign participants.
Ryan McInerney, Chief Executive Officer of Visa, said the preliminary approval marks an important advance in the company’s long-term investment in China. He noted that China boasts one of the globe’s most sophisticated digital payment ecosystems.
This development will bring another heavyweight international competitor into China’s domestic card payment market, though Visa still awaits final operating approval.
