[DigitalToday reporter Jae-won Choi] Visa has received approval from the People’s Bank of China (PBOC) and is beginning preparations to set up a bank card clearing institution in China.

Fintech Futures reported on Oct. 15 that the PBOC granted an Application to Prepare approval to Visa Information Technology Beijing, Visa’s wholly owned unit. The approval allows Visa to start preliminary work to enter China’s domestic payments market.

The approval is a preliminary step toward launching clearing operations. The outlet said Visa must complete preparations within a year and then apply for a formal licence for domestic business. It still must clear additional procedures before a full licence is issued, and the approval alone does not allow it to begin operations in China immediately.

Visa is a late entrant to China’s clearing market. American Express was the first foreign company to receive a clearing licence from the PBOC in June 2020, and Mastercard was the second in November 2023. Mastercard secured its licence by setting up a joint venture with China NetUnion Clearing. Visa’s approach differs because its wholly owned unit is the entity preparing the business. When Chinese outlet Yicai reported in November 2023, UnionPay was the only clearing institution operating in China aside from the two foreign firms.

The approval comes after a summit in May between U.S. President Donald Trump and Chinese President Xi Jinping. Chief executives of major U.S. companies, including Visa CEO Ryan McInerney (라이언 맥이너니), attended the meeting. McInerney was appointed chair of the US-China Business Council in June.

Visa called the approval an important milestone and said China is among the world’s most advanced and dynamic digital payments markets. McInerney said he was grateful for the role of U.S. and Chinese leaders who have pursued a constructive and strategically stable relationship. He also said Visa has contributed to China’s payments market for more than 40 years and would follow the necessary procedures under PBOC regulations to begin operations in China.