BEIJING — US credit card giant visa announced on Tuesday that it has received approval from the People’s Bank of China to establish a bank card clearing business in China.
The news comes as the presidents of the United States and China plan their third meeting this year.
“This is 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 Ryan McInerney, CEO of Visa. “We look forward to following the People’s Bank of China’s regulations and taking the necessary steps to start operations within China.”
McInerney joined US President Donald Trump’s business delegation to Beijing in May and later became chairman of the US-China Business Council in June. Visa’s CEO also led a visit to Beijing in early September.
“The timing is remarkable,” said George Chen, partner and chairman of Asia Group’s digital practice.
“Beijing has chosen to grant visas just ahead of the APEC summit in Shenzhen next month, when Mr. Xi (Jinping) and Mr. Trump are scheduled to meet again,” he said. “This move suggests that the Chinese government wants to see tangible progress by U.S. companies before President Trump’s next visit to China.”
After visiting Beijing in May, President Trump told Fox News that he had brought up a visa request to gain access to the Chinese market. After the September summit, China announced that it would approve applications from all foreign financial institutions to operate in the country.
Entering a closed market
Mainland China tightly controls its financial sector, favoring domestic companies and restricting cross-border capital flows.
Visa previously announced in May 2020 that it applied to the People’s Bank of China to operate a bank card payment institution.
The company is working with Chinese banks to develop a dual-branded card, with China’s UnionPay processing transactions domestically and Visa processing payments abroad. Visa announced in January that cards issued in mainland China could be linked to Apple Pay for use abroad.
rival master cardannounced that it would start processing payments in 2024 after receiving approval from the People’s Bank to start preparing bank card payments in February 2020.
american express was the first company to obtain a processing license in June 2020 after receiving consent from the People’s Bank of China in 2018.
Mobile pay accounts for the majority of everyday consumer transactions in China, primarily facilitated by Tencent’s WeChat and Alibaba affiliate Ant’s Alipay.
