BEIJING — Chinese regulators have granted approval to Visa Information Technology, a wholly owned local subsidiary of the U.S.-based global payments giant, to begin preparations for establishing a bank card clearing institution.

According to state-run Xinhua News Agency, the People's Bank of China (PBOC), the country’s central bank, greenlit the preparatory work. Under the regulatory terms, Visa Information Technology has one year to complete preparations and officially apply to commence operations.

Citing reports from Cailian Press and the South China Morning Post, a bank card clearing institution license allows operators to directly clear and settle domestic RMB transactions through their proprietary networks. This capability empowers the holder to issue branded bank cards, operate payment processing infrastructure, and handle transaction routing between issuing and acquiring institutions.

For decades, China's domestic payment market has been overwhelmingly dominated by state-owned China UnionPay. While American Express and Mastercard secured approvals to launch joint-venture clearing operations in 2020 and 2023 respectively, Visa's anticipated entry stands out as it is expected to operate as a wholly foreign-owned enterprise rather than a joint venture.

Industry analysts note that this development follows last month's state visit to the United States by Chinese President Xi Jinping and the subsequent summit between U.S. and Chinese leaders, signaling Beijing's ongoing commitment to financial market liberalization.

Ahead of the summit, China's Ministry of Commerce stated, "China has independently expanded the opening of its financial services over the years," adding that authorities would review and approve applications from financial institutions across the U.S. and other nations in accordance with the law.

In response to the decision, Visa expressed deep appreciation for the pivotal role played by U.S. and Chinese leaders in pursuing a constructive and strategically stable bilateral relationship.

Visa's path to this milestone has been lengthy. The company first submitted its initial application back in July 2017. According to Chinese media reports in 2019, PBOC officials noted that Visa voluntarily withdrew its initial paperwork in January 2018 before resubmitting a revised application three months later.

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