China will allow foreign payment card companies to operate in the country under rules issued on Tuesday, ending the monopoly of UnionPay over the nation’s US$8.4 trillion card payment market.
The move comes after Visa and MasterCard, the world’s two largest credit and debit card companies, have been lobbying for more than a decade for direct access to China’s cards market, Reuters noted.
Bank card consumer transactions reached 55 trillion yuan in 2015, accounting for 48 percent of total social consumption, according to the Chinese central bank.
Under rules issued by the People’s Bank of China (PBoC) and the China Banking Regulatory Commission, players seeking to enter the Chinese bank card market must hold 1 billion yuan (US$152.2 million) in registered capital in a local company.
The foreign bank card companies must also meet China’s national security and cyber security standards and be locally based, the report said.
“In the future there will be more diverse participants in the domestic bank card market, with many bank card brands competing on a level field,” the PBoC was quoted as saying.
Qualified foreign companies can apply to set up bank card businesses by meeting the same standards and processes required by domestic companies, the central bank said.
Foreign investors are also allowed to acquire domestic card clearing firms after passing a security review.
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