Visa has received approval from the People’s Bank of China (PBOC) to establish a bank card clearing business in China, opening a path toward serving the country’s domestic payments market. The authorization follows more than 40 years of the company’s activity in China and a licence application filed in May 2020. Visa said it must still take the steps required under PBOC regulations before it can begin domestic operations.
Approval is a milestone, not a launch date
The PBOC’s decision gives Visa permission to set up a bank card clearing business, but the company has not yet begun operating it domestically. Visa said it would proceed in line with the central bank’s regulations; the approval therefore marks an important stage in a longer process, rather than an immediate change for cardholders.
Visa’s chief executive, Ryan McInerney, called the decision an important milestone toward serving China’s domestic payments market. He said the company would take the necessary steps to begin operating in the country. The practical significance will depend on what Visa establishes under the authorization and when it is able to start processing domestic transactions.
A four-year wait for the application
Visa said it applied to the PBOC in May 2020 to operate a bank card clearing institution. The latest approval addresses that application after a lengthy review in a market where financial services are closely controlled and domestic businesses have traditionally had an advantage.
For more than 40 years, Visa has worked with Chinese banks on cards carrying both Visa and domestic payment branding. Under that arrangement, China’s UnionPay handles transactions inside the country, while Visa processes payments made overseas. A domestic clearing business would give Visa a different role from its existing overseas-processing arrangement, although the approval alone does not spell out the service’s launch timetable.
Foreign rivals have taken different routes
Visa’s authorization follows earlier steps by other U.S. payment companies. American Express was the first to receive a processing licence, in June 2020, after gaining PBOC approval in 2018. Mastercard’s joint venture in China began processing payments in 2024, following approval to begin preparations for bank card clearing in February 2020.
Those precedents show that regulatory approval and the start of processing are separate stages. Mastercard’s timeline, in particular, illustrates that permission to prepare a clearing business does not itself mean transactions begin at once. Visa’s next challenge is to complete the process required by the PBOC and turn its authorization into an operating service.
Domestic payments remain a tough market
Entering the clearing market does not mean displacing the payment methods Chinese consumers already use. Mobile payments dominate everyday transactions, with Tencent’s WeChat and Alibaba-affiliate Ant’s Alipay among the principal services. Visa would therefore be seeking a place in a payments landscape shaped by established domestic companies as well as by rules governing foreign financial businesses.
Visa has also described an overseas use for cards issued in mainland China: in January, it said those cards could be linked to Apple Pay for use abroad. That arrangement complements the existing division in which UnionPay processes domestic purchases and Visa handles overseas payments. The new approval concerns Visa’s ability to establish a domestic clearing business, not a confirmed change to those existing card arrangements.
Timing puts the decision in a wider context
The approval came as the U.S. and Chinese presidents were planning a third meeting that year. George Chen, a partner and chair of digital practice at The Asia Group, said Beijing approved the licence shortly before the APEC Leaders’ Meeting in Shenzhen, where Xi Jinping and Donald Trump were expected to meet again. He described the timing as notable and said the move suggested Beijing wanted to demonstrate progress for American businesses before Trump’s next China visit.
Visa’s request had also featured in earlier engagement between the countries: Trump said after his Beijing trip in May that he had raised the company’s market-access request. After a September summit, China said it would approve applications from all foreign financial institutions to operate in the country. Visa’s approval is a concrete development in that setting, while the company’s domestic launch still depends on completing the PBOC’s regulatory process.
Takeaway: Visa has won a long-sought PBOC authorization, but domestic operations will begin only after it completes the required regulatory steps.
Topic guide: Banking: The Complete Guide