Visa Receives China's Approval to Establish Domestic Bank Card Clearing Business
Visa has received approval from the People's Bank of China to begin preparations for establishing a domestic bank card clearing institution in the country, according to a company statement.
Visa's Application and Terms
- Visa submitted an application in May 2020 to operate a bank card clearing institution in China.
- Chinese authorities have given Visa one year to complete its preparatory work before it can apply for permission to start domestic card clearing operations.
Visa's Existing Presence in China
Visa's current operations in China focus on co-branded cards issued with local banks, where UnionPay facilitates transactions within China, and Visa handles transactions abroad.
Rivalry and Market Timing
- Visa's approval comes after Mastercard and American Express secured their respective preparations approvals and started processing payments in China.
- Visa's CEO, Ryan McInerney, has been actively involved in discussions with Chinese leaders, including a visit with President Trump in May and his role as chair of the U.S.-China Business Council.
Market Access Significance
The approval is notable as it comes ahead of the APEC Leaders' Meeting in Shenzhen, suggesting China's desire to showcase progress in U.S. business market access before Trump's next visit.
Digital Wallets in China
China's everyday purchases are predominantly made through digital wallets, with WeChat Pay and Alipay dominating the market.