Visa Inc has become the first overseas card payment company to apply for a bank-card clearing operation in China, reflecting growing challengers to domestic behemoth China UnionPay after deregulation. “Visa has filed an application with the People’s Bank of China to participate in the Chinese domestic market as a bank-card clearing institution,” the US-based card payment firm said in a statement, noting its long-term commitment is to grow in China – one of the world’s fastest growing payments markets and the one that many analysts consider is now leading the way in payments innovation. Visa expects the central bank to consider its application in line with the publicly released measures and guidelines for bank-card clearing institution applicants, it said, referring to the latest card payment guidance posted by the central bank on June 30. Mainland China’s growing bank card market has attracted various overseas players, which had been able to cooperate with banks to issue dual currency cards in China. But they have been long barred from setting up payment clearing operations in the country. The entry of foreign players will for sure means fiercer competition. Yet, it still an uncertainty if they can realistically challenge the dominance of UnionPay Wang Pengbo, analyst, Analysys The State Council, China’s cabinet, announced the opening-up of the card payments clearing sector to foreign players in 2015. A year later the central bank and the banking regulator, China Banking Regulatory Commission, jointly issued rules, noting that the registered capital of a clearing house must be at least 1 billion yuan (US$148.5 million). The opening of the bank-card clearing sector is also significant for Visa’s main traditional global rival Mastercard, which has already said it too is now be looking forward to “prompt and full market access”. Its president and chief executive officer Ajay Banga said earlier last month the company is working through options for a joint venture, or a 100 per cent Mastercard application, and expects to make a decision on this and file soon. Mastercard said it will work with Chinese financial institutions, consumers, business and government bodies to boost the sector. “The entry of foreign players will for sure means fiercer competition,” said Wang Pengbo, an analyst with Beijing-based consultancy Analysys. “Yet, it still an uncertainty if they can realistically challenge the dominance of UnionPay.” Foreign players will also need to swiftly adapt to the local market, such as lower charges, he said, quoting a charge of 0.6 per cent from clearing houses in China and rates of 1-2 per cent overseas. At the end of the first quarter, China had 6.3 billion bank cards in circulation, up 11 per cent, than a year ago. That means that each individual holds 4.53 bank cards on average, said the central bank. In that first quarter, the value of swiping plastic rose to 15.2 trillion yuan, up 14 per cent.