BEIJING: US payments firm Visa has received approval from China's central bank to begin preparations for a domestic bank card clearing institution in the country, ending years of waiting to tap into one of the world's largest payment markets.
The move marks a major step for Visa to join rivals American Express and Mastercard in operating bank card clearing services in China and represents a further opening up of the nation's tightly controlled financial sector.
The People's Bank of China (PBOC) issued an administrative approval to Visa Information Technology (Beijing) Co Ltd permitting it to begin preparatory work, according to the central bank's website.
Visa Information Technology (Beijing) is a foreign-invested enterprise established in China by Visa.
"The approval of our Application to Prepare marks a significant step forward in Visa's long-standing commitment to China," Visa CEO Ryan McInerney said in a statement on Tuesday.
The approval comes after US President Donald Trump's summit with Chinese leader Xi Jinping earlier this year in China, which included more than a dozen CEOs of top US companies, including those of Mastercard and Visa.
"We greatly appreciate the important role of the leaders of the US and China in pursuing a constructive and strategically stable relationship between the world's largest economies," McInerney said.
Visa must complete its preparations within one year, after which it can apply to open for business, the PBOC said.
The central bank, together with the nation's top banking regulator, will review the application and, if it approves, issue a bank card clearing business licence.
A goodwill gesture?
Visa was hoping to break into the Chinese market, which is dominated by state-controlled China UnionPay, with an unprecedented 100% ownership stake in a future joint venture licence, sources have told Reuters.
"This should be viewed as a goodwill gesture from Beijing towards Washington ahead of the next meeting between Presidents Xi Jinping and Donald Trump," said George Chen, partner and chair of digital practice at The Asia Group. The two are expected to meet again on the sidelines of the APEC Economic Leaders' Meeting in Shenzhen in November.
Greater market access in financial services has long been a priority for Washington, which has consistently urged Beijing to provide a more open and level playing field for foreign firms operating in China's financial sector, said Chen.
Mastercard, partnering with local clearinghouse NetsUnion Clearing Corp, won approval to prepare to set up its bank card clearing business in China in 2020.
American Express' joint venture in the country was cleared to start bank card clearing services later that year.
In China, bank cards processed 4.6 trillion transactions worth 963.60 trillion yuan (US$143.92 trillion) in 2025, according to data from the central bank, highlighting the market's enormous potential.