Beijing eases state-owned monopoly on credit cards
Rules covering credit cards to change to allow foreign companies the right to set-up clearing operations in the mainland in move seen as market liberalisation
China says it will ease restrictions on credit cards in a move that might give Visa, Mastercard and other foreign competitors greater access to its market.
Foreign companies will be allowed for the first time to apply to establish credit card clearing operations in China, said a Cabinet announcement late on Wednesday. It gave no details of what qualifications would be required for a foreign competitor to be approved or when licenses might be issued.
Beijing’s restrictions have given a monopoly on credit card processing to a state-owned entity, UnionPay. All banks are required to participate in UnionPay and all transactions must be processed through it.
The World Trade Organisation, ruling on a complaint by the United States, said two years ago the restrictions violated China’s free-trade commitments by treating foreign credit card processors unequally. The government said it would review the decision but did little to increase market access.
Wednesday’s statement said the move was aimed at opening up China’s financial industries.