Beijing to open up card clearing business
UnionPay's monopoly over the clearing business will end under China's plan to allow foreign issuers to set up firms to process yuan payments
Chinese regulators plan to open the yuan-denominated credit-card clearing business to foreign companies from August next year, a source at the country's largest credit-card supplier told the South China Morning Post.
People's Bank of China officials in September informed card supplier Goldpac Group that the regulator planned to allow foreign firms to open their own clearing companies for card payment processing in August next year, effectively ending state-owned China UnionPay's monopoly over the business, said a Goldpac department head.
"We have confidence that this will happen," the source said, noting that Goldpac was preparing for increased card business. "When the central bank gives a date, they always follow through with that."
The PBOC did not immediately respond to a faxed request for comment yesterday.
According to Goldpac's website, the company has supplied more than 1.6 billion cards to the Asia market. It made 80 per cent of Visa and MasterCard cards in China, CLSA data showed.
On Wednesday, the State Council said foreign firms meeting certain criteria could set up their own clearing firms, but it gave no details on a timeframe for opening the market.
Foreign card companies welcomed the announcement but said there were still few details.