Visa Receives Approval for Bank Card Clearing Business in China
- Visa has received approval from the People’s Bank of China to establish a bank card clearing business.
- Visa CEO Ryan McInerney emphasizes this as a significant step into China’s domestic payments market.
- The approval comes ahead of an APEC Leaders’ Meeting, signaling progress in U.S.-China business relations.
BEIJING — U.S. credit card company Visa announced on Tuesday that it has obtained approval from the People’s Bank of China (PBOC) to establish a bank card clearing business within the country.
This announcement aligns with the upcoming third meeting between U.S. President Donald Trump and Chinese President Xi Jinping for the year.
Visa stated, “This marks an important milestone toward the company serving China’s domestic payments market.” CEO Ryan McInerney highlighted that Visa has been an “active contributor to China’s dynamic payments landscape for more than 40 years” and expressed eagerness to follow the PBOC’s regulations to initiate domestic operations.
McInerney recently participated in a U.S. business delegation to Beijing in May and took on a leadership role as chair of the U.S.-China Business Council in June. He also led another delegation to Beijing in early September.
George Chen, partner and chair of digital practice at The Asia Group, remarked on the timing of Visa’s approval. “Beijing chose to approve Visa’s license just ahead of the APEC Leaders’ Meeting in Shenzhen next month, where Xi and Trump are expected to meet again. The move suggests that Beijing is keen to demonstrate tangible progress for American businesses before Trump’s next visit to China,” he said.
After his trip to Beijing in May, Trump mentioned to Fox News that he had discussed Visa’s request for access to the Chinese market. Following the September summit, China announced plans to approve operating applications from all foreign financial institutions.
Entering a Closed Market
Mainland China has historically maintained a firm grip on its financial sector, preferring domestic companies while restricting cross-border capital flows.
Visa previously highlighted its application to the PBOC in May 2020 to operate a bank card clearing institution. The company has collaborated with Chinese banks on dual-branded cards, with China’s UnionPay processing domestic transactions and Visa handling overseas payments. In January, Visa announced that mainland China-issued cards could be linked to Apple Pay for international use.
In addition, Mastercard initiated payment processing through its joint venture in China in 2024 after gaining PBOC approval to start bank card clearing operations in February 2020. Meanwhile, American Express became the first to receive its processing license in June 2020, following PBOC approval in 2018.
Currently, mobile payments dominate consumer transactions in China, primarily through services provided by Tencent’s WeChat and Alibaba-affiliate Ant’s Alipay.
News Courtesy of CNBC
