The People’s Bank of China, it’s central bank says it has accepted an application from a unit of American Express regarding starting operations in China – clearing a major hurdle in its bid to accessing the countries $27 trillion payments market after the central bank accepted its application to start a bank card clearing business.
The application status was revealed in an official social media post from the People’s Bank of China (PBOC). It did not elaborate on when it will approve the start of operations.
American Express in November 2018 became the first foreign company to win permission to start preparation for the business after forming a joint venture with LianLian, a Chinese FinTech-services firm.
The latest move shows progress in US payment networks’ battle for access to mainland China, which has been a point of contention raised in the trade dispute with the US.
China in June 2015 allowed foreign bank-card clearing providers to obtain licenses by setting up units or acquiring a local company, ending a monopoly by state-run UnionPay. But progress in entering China has been slow for Visa and Mastercard, with neither firm as of yet obtaining approval.
China had 8.2 billion bank cards in circulation at the end of September, with 90% of them debit cards.
American Express will pit itself against large domestic players and a well-developed market for mobile payments. Mobile transactions topped 190 trillion yuan ($27 trillion) in China in 2018, making it the world’s largest such market.
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