People’s Bank of China Approves Visa’s Application to Prepare for Domestic Clearing

Visa announced on Tuesday that the People’s Bank of China has approved its “Application to Prepare” for a domestic bank card clearing business. This regulatory clearance allows the payment network to begin formal preparations for operating within China, though it does not yet grant permission to process domestic payments directly.

The company confirmed the approval in a statement issued on Tuesday, noting that it will now take necessary steps pursuant to PBOC regulations to begin domestic operations. Visa did not provide a specific timeline for when it expects to start processing transactions or complete the preparation phase. The approval follows a lengthy regulatory review process that began with the initial application submission in May 2020, according to reports from CNBC.

Regulatory Context and Diplomatic Timing

Visa’s chief executive Ryan McInerney stated that the company looks forward to proceeding with the required steps under PBOC regulations. In the same statement, McInerney credited leaders of the United States and China for fostering the economic relationship that facilitated this progress. McInerney has been actively engaged in US-China business diplomacy, joining President Donald Trump’s delegation to Beijing in May and leading a US-China Business Council trip to Beijing in early September.

President Trump told Fox News that he had raised Visa’s market access request during the May trip, according to CNBC. Following a September summit, China announced it would approve applications from all foreign financial institutions seeking to operate in the country. George Chen, a partner at The Asia Group, told CNBC that the approval timing suggests Beijing aims to demonstrate tangible progress for American businesses before the upcoming APEC leaders’ meeting in Shenzhen.

Competitive Landscape and Market Structure

China has historically maintained tight control over its financial sector, favoring domestic players in payment processing. Visa’s main US competitors have already advanced further in this regulatory landscape. American Express received initial central bank approval in 2018 and secured a processing license in June 2020. Mastercard’s joint venture received approval to begin preparations in February 2020 and started processing payments in 2024.

Until this approval, Visa operated in China through dual-branded cards issued in partnership with local banks. Under this arrangement, China’s UnionPay processes transactions domestically, while Visa handles payments made abroad by Chinese cardholders. Most everyday consumer payments in China are conducted through mobile apps, primarily Tencent’s WeChat and Ant Group’s Alipay. Last month, Visa, Mastercard, and Ant International formed a partnership to conduct ID checks for agents who shop on behalf of consumers.

What should you do?

Security and technology professionals should monitor regulatory announcements from major financial institutions for updates on operational timelines and compliance requirements. Organizations handling cross-border payments should review their current vendor contracts to understand how new domestic clearing capabilities might affect transaction routing. Companies operating in China should track the integration of foreign payment networks with local mobile app ecosystems for potential new security or compliance obligations.

What to do and how to stay safe: Visa

• Monitor official statements from Visa and the People’s Bank of China for updates on operational launch dates and specific regulatory requirements for the new clearing business.
• Review current payment processing agreements with Chinese banks to understand how Visa’s new domestic capabilities may impact transaction routing and settlement processes.
• Assess the security implications of new partnerships between foreign payment networks and local Chinese technology firms, particularly regarding identity verification and data handling.
• Track broader US-China financial regulatory developments that may affect the operational environment for other foreign financial institutions seeking market access.

General security guidance from the Threat Times newsroom. It is not confirmed advice from the organisations named in this story.

Frequently asked questions

Can Visa process domestic payments in China immediately after this approval?

No, the approval only permits Visa to begin formal preparations for a domestic clearing business; it does not yet allow the company to process domestic payments.

When did Visa first apply for this approval?

Visa first applied to the People’s Bank of China in May 2020, according to reports from CNBC.

Which other US payment networks have similar approvals in China?

American Express received a processing license in June 2020, and Mastercard’s joint venture started processing payments in 2024 after receiving preparation approval in February 2020.