Visa has received approval from the People’s Bank of China to prepare for the establishment of a domestic bankcard clearing institution in China, opening a regulatory path into a market long led by China UnionPay. The decision was made on October 13.
The approval gives Visa permission to make preparations. It does not authorise the company to begin domestic clearing operations.
China opened its bankcard clearing market to foreign firms in 2015. Until then, China UnionPay had held a monopoly over clearing for renminbi-denominated bankcards.
At the time of that opening, China’s bankcard clearing market was described as the world’s largest by both number of cards and transaction value.
Visa said it has taken part in China’s payments market for more than 40 years. Its approval opens a route into domestic clearing, an area from which it had previously been excluded.
Its rivals have moved further along the approval route. An American Express joint venture received final permission to launch bankcard clearing services in China in 2020, while Mastercard’s joint venture won approval in November 2023.
For Visa, the approval is a first regulatory step. Domestic clearing operations will require further authorisation, and the timing and structure of any eventual business have yet to be set out.
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