BEIJING – US credit card giant visa announced Tuesday that it has received approval from the People’s Bank of China to establish a bank card clearing business in the country.
The news comes as the presidents of the US and China plan to meet for the third time this year.
“This marks an important milestone for the company serving China’s domestic payments market,” Visa said in a statement.
“For more than 40 years, Visa has been an active contributor to China’s dynamic payments landscape,” said Visa CEO Ryan McInerney. “We look forward to taking the necessary steps in the process, according to the PBOC’s regulations, to start domestic operations in China.”
McInerney joined US President Donald Trump’s business delegation to Beijing in May and then chaired the US-China Business Council in June. The Visa CEO also led a trip to Beijing in early September.
“Time is of the essence,” said George Chen, partner and head of the digital practice, The Asia Group.
“Beijing voted to approve the visa license ahead of the APEC Leaders’ Meeting in Shenzhen next month, where Xi will attend [Jinping] and Trump is expected to meet again,” he said. “The move shows that Beijing wants to show real progress for American business before Trump’s next visit to China.”
Trump told Fox News after a trip to Beijing in May that he brought up his Visa request to gain access to the Chinese market. After the summit in September, China said it would approve applications from all foreign financial institutions to operate in the country.
Enter the closed market
Mainland China maintains a grip on the financial sector, favoring domestic players and restricting cross-border capital flows.
Visa previously said it had applied with the PBOC in May 2020 to operate a bank card clearing institution.
The company has partnered with Chinese banks for dual-brand cards, with UniPay China processing domestic transactions and Visa processing overseas payments. In January, Visa said that its mainland China-issued cards could be linked to Apple Pay for use abroad.
competition MasterCardThe joint venture company in China said it will start the payment process in 2024 after getting the PBOC’s approval to start preparations to clear bank cards in February 2020.
American Express as the first, received a processing license in June 2020 after getting the PBOC’s nod back in 2018.
Mobile payments dominate daily consumer transactions in China, mainly facilitated by Tencent’s WeChat and Alibaba-affiliate Ant’s Alipay.