China is poised to start clearing domestic bank card transactions in a move that will allow foreign companies such as Visa and MasterCard enter the market.
Foreign companies will be able to establish booths in China as of today (Monday) and apply to the Central Bank for licenses for bank card clearing. The move will likely end a near monopoly by China UnionPay.
Bank card transactions stood at 42.38 trillion yuan or US$6.8 trillion, last year, up more than a third from 2013. The market was valued at US$6.84 trillion in 2014. Experts say competition will help boost growth in the sector.
"Once this market opens, it requires more entities that provide bank card clearing services. This would impact UnionPay's market dominance position. This would in turn make this challenge an opportunity, and boost development of the whole bank card clearing industry through competition," said Yang Tao, assistan, Ins't of Finance & Banking, CASS.
