Visa Gets Approval to Prepare China Payments Business

Visa has received approval from the People’s Bank of China to prepare to establish a domestic bankcard-clearing institution, a step toward entering China’s local payments market that does not yet authorize it to process domestic transactions. Visa said the approval marked progress in its effort to serve the domestic market. Chief Executive Ryan McInerney said the company intends to comply with Chinese regulatory requirements. Visa has operated in China for more than 40 years, but its existing activity has not included clearing domestic card transactions through its own local institution. The approval allows Visa to begin preparatory work. Xinhua reported that the company must complete that work within one year before applying to commence operations and obtain a clearing-business licence. The start date for that preparation period was not specified in the reports. Visa must secure the further licence before it can begin domestic clearing. Visa applied to establish a clearing institution, with Reuters reporting that the application was made in May 2020. Another report, citing local media, put the application in 2017. The reports do not explain the difference between those dates.