Mainland China to allow foreign credit card firms to apply for clearing licences

Foreign companies in mainland China can apply for bank card clearing licences starting from June 1, a step towards allowing firms such as Visa and MasterCard to compete directly with mainland card monopoly China UnionPay.

The State Council announced the new regulations on its website on Wednesday after saying in October last year that foreign firms meeting certain criteria could set up clearing companies. At the time, it did not give a timeframe for making the change, although sources at a major card-manufacturing firm said the People's Bank of China was aiming to open the market in August this year.

The volume of mainland bank card transactions hit 449.9 trillion yuan last year, the central bank said on its website.

Foreign card firms were positive. "We are hopeful these new regulations will permit additional participants in the Chinese domestic market," said a spokesman for Visa in China.

The firm was looking forward to more details on how the new regulations would be implemented.

American Express was also waiting for details, a spokeswoman said.