The central bank has yet to issue formal acknowledgment.
China’s central bank has reportedly refused to acknowledge the applications of Visa and Mastercard which have long been seeking to enter China, reports Financial Times, in a development that leaves homegrown card-clearing giant UnionPay with a stranglehold over the market.
Although the applications of the US credit card companies have been formally submitted to the People’s Bank of China (PBoC) since 2017, the central bank has not formally acknowledged the submissions which represents the first step towards approval, insider sources told FT. The application procedure in 2017 states that the central bank must decide on applications within 90 days of acknowledgment or shouli in Chinese.
Foreign players have long tried to break into China’s lucrative credit card market. In October 2014, China declared that it would open its market to foreign players two years after the World Trade Organisation (WTO) ruled that China discriminates against foreign payment providers.
Through a 50-50 joint venture with a Chinese partner, American Express became the first foreign card scheme to win initial approval from the central bank in November 2018 to set up a renminbi bank-card clearing company.
The PBoC is also the largest shareholder in the domestic Unionpay which occupies the market-leading position on renminbi bank-card payments in China.
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