Global payments giant Visa has gained long-awaited approval to set up card operations in China, a breakthrough that comes ahead of an expected meeting next month between Donald Trump and Xi Jinping. China's central bank said on Tuesday it would allow Visa to begin formal preparations to establish a card-clearing business in the country. Visa chief executive Ryan Mc Inerney called the approval "a significant step forward in Visa's longstanding commitment to China."
The San Francisco-based company has sought to access the Chinese market since at least 2015, when it established a local unit. Gaining approval proved elusive, however. China's payments market is dominated by the state-backed Union Pay network and technology giants Alibaba and Tencent, which operate the widely used Alipay and WeChat Pay apps. A 2012 World Trade Organization ruling in favour of the US on China's de facto ban on foreign payment providers was ignored by Beijing. Under a trade deal struck during Trump's first term, Beijing agreed to accelerate approvals for US card companies, and American Express and Mastercard joint ventures gained approval in 2018 and 2020.
Mc Inerney attributed the approval to "the important role of the leaders of the US and China," who have held a flurry of diplomacy this year. The two leaders are set to meet again at the Asia-Pacific Economic Cooperation forum in Shenzhen next month and at the G20 summit in Miami in December. George Chen of the Asia Group said the approval "should be viewed as a goodwill gesture from Beijing towards Washington." It could also raise hopes for other US financial groups, including Citigroup and Citadel Securities, awaiting approvals.
If granted final approval, Visa would become the first foreign card network to operate a wholly owned clearing business in mainland China. However, it faces a dramatically changed market, as QR code payments through Alipay and WeChat Pay dominate everyday transactions. Those apps already support linking Visa, Mastercard and American Express cards, part of China's broader campaign since 2024 to make spending easier for foreign visitors.
Source: Financial Times Companies · Summarized by HeadlinesBriefing