BEIJING--China unveiled detailed rules Wednesday that allow
domestic and foreign companies to set up bank card-clearing
operations, a sector long dominated by the state.
The announcement of the rules follows a decision in October by
the State Council, China's top government body, that Beijing would
ease its grip on bank and credit card clearing as part of an effort
to open up the nation's financial sector.
The move is expected to offer foreign companies such as Visa
Inc. (V) and MasterCard Inc. (MA) a chance to expand their presence
in China.
Currently, state-run China UnionPay Co. has a near monopoly on
processing and clearing yuan-denominated payments made through bank
cards and credit cards.
Major international credit cards are widely accepted in China
but foreign card companies can only process transactions made on
cards issued by foreign banks. Chinese banks aren't able to issue
cards in cooperation with U.S. card processors unless they also
carry the China UnionPay brand.
The new rules, released on the main government website, state
that companies need approval from China's central bank and the
banking regulator to conduct clearing operations, a process that
involves settling payments between banks and vendors.
The rules, which take effect June 1, also require applicants to
have at least 1 billion yuan ($161.2 million) in registered
capital. Foreign institutions need to set up an arm in China and
receive a license from Chinese regulators.
Write to Grace Zhu at grace.zhu@dowjones.com
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