Visa announced on Tuesday that it has received approval from the People's Bank of China (PBOC) to begin the process of establishing a local bank card clearing business in China, marking a significant milestone after more than 40 years of engagement with the Chinese payments market [1]. This approval follows similar moves by Mastercard and American Express, with Mastercard's joint venture starting payment processing in 2024 after receiving PBOC approval in February 2020, and American Express obtaining its processing license in June 2020 after initial approval in 2018 [1].
Visa CEO Ryan McInerney emphasized the importance of this development, stating, "We look forward to taking the necessary steps in the process, pursuant to the PBOC's regulations, to begin operating domestically in China" [1]. The timing of the approval is notable, as it comes just ahead of the APEC Leaders' Meeting in Shenzhen, where U.S. President Donald Trump and Chinese President Xi Jinping are expected to meet again. According to George Chen, partner and chair of digital practice at The Asia Group, this move signals Beijing's intent to demonstrate tangible progress for American businesses prior to Trump's next visit [1].
Visa has a longstanding presence in China, having worked with Chinese banks for dual-branded cards, where UnionPay handles domestic transactions and Visa processes overseas payments. In January, Visa announced that mainland China-issued cards could be linked to Apple Pay for overseas use [1]. The company initially applied to the PBOC in May 2020 to operate a bank card clearing institution [1].
The Chinese financial sector has traditionally favored domestic players and maintained strict controls on cross-border capital flows. However, following a summit in September, China stated it would approve applications from all foreign financial institutions to operate in the country [1]. Despite the dominance of mobile payments in China, primarily through Tencent's WeChat and Alibaba-affiliate Ant's Alipay, Visa's entry into the domestic clearing market is seen as a significant opening for foreign financial firms [1].
CONCLUSION
Visa's approval to establish a bank card clearing business in China marks a major step forward for the company and signals increased openness in China's financial sector to foreign players. The move is expected to enhance competition and provide new opportunities for Visa, Mastercard, and American Express in the world's second-largest payments market. Market sentiment is positive, reflecting the significance of this regulatory breakthrough.