Visa Approved to Prepare Bank Card Clearing Institution in China

According to a report by Jinse Finance on October 13, citing CCTV, the People's Bank of China announced today that it has approved Visa Inc. (a corporate entity established in China by Visa, classified as a foreign-invested enterprise) to prepare for the establishment of a bank card clearing institution. This approval only grants "preparation qualifications" and does not equate to permission to directly conduct business. After obtaining preparation qualifications, Visa must complete all preparatory work within one year in accordance with regulatory requirements. Once preparations are complete, Visa will need to submit an application to commence operations. This application will be jointly reviewed by the People's Bank of China and the National Financial Regulatory Administration. If approved, a bank card clearing business license will be issued, marking formal authorization. Until Visa obtains the final license, it cannot issue Visa-branded RMB bank cards within China, nor can it provide RMB bank card clearing services for domestic entities. Currently, Visa's operations in China are focused on clearing cross-border transactions for foreign currency cards. Existing regulations clearly state that solely providing cross-border foreign currency bank card clearing services does not require the establishment of a bank card clearing institution within China. This explains why domestic users can use Visa foreign currency cards for overseas purchases, and foreign visitors can use Visa foreign currency cards for transactions within China. However, Visa is currently unable to engage in RMB card clearing services for domestic transactions. To put it simply: Visa can already handle cross-border foreign currency card transactions, but it cannot yet process domestic RMB card clearing services.