American Express wins bank card clearing licence for China’s US$27 trillion market

American Express received approval to start bank card clearing services in China, making it the first foreign payments network to be allowed to process local currency transactions in one of the world’s largest markets.

The People’s Bank of China granted a network clearing license to American Express’s China joint venture, Express (Hangzhou) Technology Services, the central bank said in a statement on Saturday. The company, which won initial approval in 2018, is required to start the clearing service within six months, according to the statement.

The approval marks a win for the card giant amid rising political tension between the US and China sparked by the coronavirus outbreak and a crackdown on Hong Kong. It underscores China’s commitment to opening its US$45 trillion financial markets this year, in a bid to attract foreign capital and support growth.

The bank card clearing network being built by the joint venture will process both online and offline payment transactions, and the company will cooperate with leading Chinese mobile wallet services providers, according to a statement from American Express.

“This approval represents an important step forward in our long-term growth strategy,” Stephen Squeri, chief executive officer of AmEx, said in the statement.

AmEx will face large domestic competitors and a well-developed market for mobile payments. Mobile transactions topped 190 trillion yuan (US$27 trillion) in China in 2018, making it the world’s largest such market, according to iResearch. Ant Financial’s Alipay and Tencent Holdings’s WeChat Pay are the dominant firms.