(9 June 2016 – China) China will let foreign payment card firms to operate in the country under new rules announced this week.
The announcement provides payment services such as Visa and MasterCard the opportunity to access the country’s CNY 55 trillion (A$11.25 trillion) card payment market.
Both companies have been lobbying Beijing for over a decade for direct access to China’s cards market, which is predicted to become the world’s biggest by 2020.
According China’s central bank, the bank card consumer transactions reached CNY 55 trillion in 2015, accounting for 48 percent of total social consumption.
The market is dominated by state-run China UnionPay. It recently signed a five-year deal with UK based VocaLink, which will enable UnionPay cardholders to access ATMs in Britain and continental Europe.
The new rules issued by the People’s Bank of China (PBOC) and the China Banking Regulatory Commission require applicants to hold CNY 1 billion in registered capital in a local company.
According to Reuters, foreign bank card companies must also adhere to the country’s national security and cyber security standards and be locally based.
Once firms have submitted their applications, the PBoC will have 90 days to grant an approval. Following that, companies must set up operations within a year.