With a new found direction, not seen since its merger with Visa Europe began, Visa is on the charge, becoming the first overseas card payment company to apply for a bank-card clearing operation in China.
Visa applies for direct bank-card clearing access in China
“Visa has filed an application with the People’s Bank of China to participate in the Chinese domestic market as a bank-card clearing institution,” the company says in a statement.
The company expects the central bank to consider its application in line with the publicly released measures and guidelines for bank-card clearing institution applicants, it said.
Mainland China’s growing bank card market has attracted various overseas players, which had been able to cooperate with banks to issue dual currency cards in China. However, foreign firms have not been granted permission to establish domestic payment clearing operations.
The State Council, China’s cabinet, announced the opening-up of the card payments clearing sector to foreign players in 2015.
A year later the central bank and the banking regulator, China Banking Regulatory Commission, jointly issued rules, noting that the registered capital of a clearing house must be at least 1 billion yuan ($150 million).
Visa’s rival, Mastercard has also expressed interest in access to the Chinese market. Mastercard’s president and chief executive officer Ajay Banga said in July that the company is working through options for a joint venture, or a 100% Mastercard application, and expects to make a decision on this and file soon.
Mastercard said it will work with Chinese financial institutions, consumers, business and government bodies to boost the sector.
According to the People’s Bank of China, at the end of the first quarter, China had 6.3 billion bank cards in circulation, up 11% from a year earlier.
In that first quarter, the value of swiping plastic rose to 15.2 trillion yuan, up 14%.
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