Dive Brief:
- Visa said Tuesday in a press release that it has won approval from the Chinese government for “an application to prepare” to begin clearing card transactions in the country.
- The San Francisco-based card network, the largest in the U.S., said it will “continue its efforts to complete the process” so it can begin offering the services.
- “This marks an important milestone toward the company serving China’s domestic payments market,” the release said.
Dive Insight:
Visa CEO Ryan McInerney noted in the release that the card network had been a part of China’s payments landscape for some 40 years, given the use of its services by international card holders in the country.
“We look forward to taking the necessary steps in the process, pursuant to the [People’s Bank of China’s] regulations, to begin operating domestically in China,” McInerney said in the release.
Visa is chasing its smaller U.S. rival, Mastercard, which won approval to operate within China in 2023. Purchase, New York-based Mastercard and a Chinese counterpart formed a Beijing joint venture, called Mastercard NetsUnion Information Technology, began processing payments in 2024 for cards issued by the country’s banks, according to a press release at that time.
The U.S.-based card companies had sought since at least 2017 to gain entry to the domestic Chinese market, in the hopes of attracting banks and consumers in that populous country to their services. Having the wherewithal to sell services in the country domestically can supplement and complement the U.S. card companies’ existing cross-border services flowing through China.
Still, U.S. card companies face significant domestic competition in China. They’re up against the dominant government-backed China UnionPay, which likely has an edge in attracting Chinese banks as card issuers.
“We greatly appreciate the important role of the leaders of the United States and China in pursuing a constructive and strategically stable relationship between the world’s largest economies,” McInerney said in the release.
