Visa Wins PBOC Approval for Domestic Card Clearing Operation in China After Five-Year Wait
Visa Wins PBOC Approval for Domestic Card Clearing Operation in China After Five-Year Wait #
Visa has received regulatory clearance from the People’s Bank of China to begin formal preparations for a domestic bank card clearing institution, its first major step into the world’s largest payments market after more than five years of waiting.
The PBOC issued an administrative approval to Visa Information Technology (Beijing) Co Ltd, a foreign-invested enterprise Visa established in China, granting it permission to start preparatory work. Under the terms set by Chinese authorities, the company must complete those preparations within one year, after which it may submit a formal application to begin clearing operations. The central bank and China’s top banking regulator would then jointly review that application before issuing a bank card clearing business licence.
Visa CEO Ryan McInerney welcomed the decision, saying it represented “a significant step forward in Visa’s long-standing commitment to China” and praising the role of US and Chinese leadership in building a more stable bilateral relationship. McInerney had joined President Donald Trump’s business delegation to Beijing earlier this year and in June took on the chairmanship of the US-China Business Council.
The approval, which has been pending since Visa first filed its application with the PBOC in May 2020, leaves the company behind rivals that have already advanced further into the Chinese domestic market. Mastercard, operating through a joint venture with local clearinghouse NetsUnion Clearing Corp, received its own PBOC preparation approval in February 2020 and began processing domestic payments in 2024. American Express secured its domestic clearing licence in June 2020.
Visa’s current presence in China has been largely limited to co-branded cards issued with Chinese partner banks, under a model where UnionPay handles in-country transactions and Visa takes over only when cardholders use their cards abroad. A full operating licence would allow Visa to process domestic yuan-denominated transactions through its own network, a much larger pool of activity than cross-border flows.
That outcome remains some distance away. The domestic payments market in China is dominated by state-backed China UnionPay and the super-apps Alipay and WeChat Pay, and Visa would face a further regulatory process before it could compete directly. According to sources cited by Reuters, Visa has also been seeking an unprecedented 100% ownership stake in any future licensed entity, a structure that would set it apart from Mastercard’s joint-venture model.
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