News

China opens to foreign card brands, promises fair play with UnionPay

June 14, 2016

China has issued new rules that could finally give the major card brands their long-sought foot in the door to an $8.4 trillion (and growing) card market.

Visa, MasterCard and other players will have some groundwork to do first, though. According to a Reuters report, would-be market entrants will have to place 1 billion yuan ($152 million) of registered capital in a local company and must, themselves, be locally based.

Additionally, nondomestic applicants must comply with China's national security and cyber security standards. 

China will boast the world's largest cards market by 2020. The People's Bank of China estimates that cards currently account for 48 percent of total social consumption in the country.

The rules issued by the central bank and the China Banking Regulatory Commission require that applicants hold 1 billion yuan ($152.2 million) in registered capital in a local company.

The foreign bank card companies must also meet China's national security and cyber security standards and be locally based.

The Chinese government has spent the past year setting up standards for foreign bankcard companies. This action followed a 2012 ruling by the World Trade Organization that China was unfairly discriminating against foreign payment networks in favor of its own domestic scheme, China UnionPay.

A UnionPay spokesman told Reuters that the company would abide by the new rules and compete fairly with other players.