U.S. payments giant Visa said Tuesday it has received approval to prepare to set up a bank card clearing business in China, a move that could allow Visa to compete for a share of the country’s vast payments market.
Some analysts see the development as an encouraging sign for U.S. businesses following Chinese leader Xi Jinping’s meetings with President Donald Trump during a state visit to Washington last month.
The San Francisco-based payment processing company said the long-awaited approval marked “a significant step forward in Visa’s long-standing commitment to China.”
“We greatly appreciate the important role of the leaders of the United States and China in continuing a constructive and strategically stable relationship between the world’s largest economies,” Visa CEO Ryan McInerney said in a statement.
China’s official Xinhua news agency said authorities require Visa to complete preparatory work within a year. After that, it can apply to start its domestic bank card clearing business operations in the country.
Mastercard and American Express have already launched domestic clearing in China through joint ventures.
President Donald Trump said he raised the issue of visa access during his visit to Beijing in May.
McInerney was among the guest list at the Trump-Xi dinner at the White House during Xi’s trip to Washington, alongside Mastercard CEO Michael Miebach.
George Chen, partner and chairman of the digital practice at The Asia Group, said the approval could be seen as a goodwill gesture from China toward the United States ahead of a planned November meeting between Xi and Trump in Shenzhen, China, which would be their third in-person meeting this year.
“The timing is remarkable,” Chen, of the Washington-based consultancy that advises companies on how to do business in markets including Asia, said in written comments. “This move suggests that Beijing wants to demonstrate tangible progress for American businesses before Trump’s next visit to China.”
Better access to the financial services market has long been a priority for Washington, he added, and Visa’s approval can be seen as a positive sign of China’s desire to expand opportunities for foreign businesses.
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