Dado Ruvic | Reuters
BEIJING — U.S. credit card giant Visa announced Tuesday it had received approval from the People's Bank of China for setting up a bank card clearing business in the country.
The news comes as the U.S. and Chinese presidents plan for their third meeting this year.
"This marks an important milestone toward 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," Visa CEO Ryan McInerney said. "We look forward to taking the necessary steps in the process, pursuant to the PBOC's regulations, to begin operating domestically in China."
McInerney joined U.S. President Donald Trump's business delegation to Beijing in May and subsequently became chair of the U.S.-China Business Council in June. The Visa CEO also led a trip to Beijing in early September.
"The timing is notable," said George Chen, partner and chair of digital practice, The Asia Group.
"Beijing chose to approve visa's license just ahead of the APEC Leaders' Meeting in Shenzhen next month, where Xi [Jinping] and Trump are expected to meet again," he said. "The move suggests that Beijing is keen to demonstrate tangible progress for American businesses before Trump's next visit to China."
Trump told Fox News after his Beijing trip in May that he brought up Visa's request to gain China market access. After the summit in September, China said it would approve applications from all foreign financial institutions to operate in the country.
Entering a closed market
Mainland China has kept a tight grip on its 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 worked with Chinese banks for dual-branded cards, for which China's UnionPay processes transactions domestically and Visa processes overseas payments. In January, Visa said the mainland China-issued cards could be linked to Apple Pay for use overseas.
Rival Mastercard's joint venture in China said it started processing payments in 2024 after getting the PBOC's approval to begin bank card clearing preparations in February 2020.
American Express was the first, receiving its processing license in June 2020 after getting the PBOC nod back in 2018.
Mobile pay dominates daily consumer transactions in China, primarily facilitated by Tencent's WeChat and Alibaba-affiliate Ant's Alipay.