Banking & Finance

PBOC says no tough rules for foreign bank card firms

Central bank vice-governor says opening up to proceed actively and cautiously

PUBLISHED : Tuesday, 10 November, 2015, 4:34pm
UPDATED : Tuesday, 10 November, 2015, 4:34pm

Beijing will not impose tough licensing restrictions on overseas bank card providers seeking to enter the mainland’s US$7 trillion card payment market, a senior central bank official said on Tuesday.

Industry sources said last month they were concerned the central government would limit the number of licences issued to foreign card providers and force them to operate through joint ventures with local partners.

However, People's Bank of China vice-governor Fan Yifei told a conference there were no plans to bring in such requirements.

“We will actively and cautiously open up China's card payment market according to laws and regulations, and encourage fair competition,” Fan said.

Foreign card companies, including Visa and MasterCard, have been lobbying for more than a decade for direct access to the mainland’s fast-growing cards market, which is projected to become the world's biggest by 2020.

The State Council announced in April that the mainland would allow foreign firms to apply to the central bank for licences to operate bank card clearing businesses from June 1, a move aimed at addressing a 2012 ruling by the World Trade Organisation that found Beijing was discriminating against US credit card firms.

Currently China UnionPay, a state-controlled consortium, has a monopoly on all yuan payment cards issued and used on the mainland.

“As China opens up its market, more institutions will enter interbank clearing market. UnionPay will compete and collaborate with new joiners,” China UnionPay chairman Ge Huayong said following Fan's remarks at the same event.

Bank card consumer transactions stood at 42.38 trillion yuan (HK$51.71 trillion) last year, central bank data showed, representing an annual growth of 33 per cent.

The PBOC released draft implementation regulations in July and the detailed measures would be finalised “as soon as possible”, Fan said.