U.S. payments giant Visa said Tuesday that it received approval to prepare to set up a bank card clearing business in China, a move that could allow Visa to compete for a share of the country’s large payments market.
Some analysts see the development as an encouraging sign for American businesses following Chinese leader Xi Jinping’s meetings with President Donald Trump during a state visit to Washington last month.
The San Francisco-based payment processing company said the long-awaited approval marked “a significant step forward in Visa’s long-standing commitment to China.”
“We greatly appreciate the important role of the leaders of the United States and China in pursuing a constructive and strategically stable relationship between the world’s largest economies,” Visa CEO Ryan McInerney said in a statement.
China’s official Xinhua news agency said authorities require that Visa complete preparatory work within one year. After that it can apply to commence its domestic bank card clearing business operations in the country.
Mastercard and American Express have already started domestic clearing in China under joint ventures.
President Donald Trump said he raised the issue of access for Visa during his visit to Beijing in May.
McInerney was part of the guest list at the White House Trump-Xi dinner during Xi’s Washington trip, alongside Mastercard CEO Michael Miebach.
George Chen, partner and chair of digital practice at The Asia Group, said the approval could be viewed as a goodwill gesture from China toward the United States ahead of an expected November meeting between Xi and Trump in Shenzhen, China, which would be their third in-person meeting this year.
“The timing is notable,” Chen, of the Washington-based consultancy that advises companies on doing business in markets including Asia, said in written comments. “The move suggests that Beijing is keen to demonstrate tangible progress for American businesses before Trump’s next visit to China.”
Greater market access in financial services has long been a priority for Washington, he added, and Visa’s approval can be viewed as a positive sign of China’s willingness to expand opportunities for foreign companies.
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