BEIJING (AP) - China says it will ease restrictions on credit cards in a move that might give Visa, Mastercard and other foreign competitors greater access to the Chinese market.
BEIJING (AP) — China says it will ease restrictions on credit cards in a move that might give Visa, Mastercard and other foreign competitors greater access to the Chinese market.
Foreign companies will be allowed for the first time to apply to set up credit card clearing operations in China, said a Cabinet announcement late Wednesday. It gave no details of what qualifications would be required for a foreign competitor to be approved or when licenses might be issued.
Beijing's restrictions have given a monopoly on credit card processing to a state-owned entity, UnionPay. All banks are required to participate in UnionPay and all transactions must be processed through it.
The World Trade Organization, ruling on a complaint by the United States, said two years ago the restrictions violated China's free-trade commitments by treating foreign credit card processors unequally. The government said it would review the decision but did little to increase market access.
Wednesday's statement said the move was aimed at opening up China's financial industries.
The ruling Communist Party has promised ambitious market-opening measures in an effort to make the slowing, state-dominated Chinese economy more efficient and productive.
Foreign credit cards that are issued abroad are accepted by some hotels and other businesses in China but foreign companies are barred from issuing cards in the country's growing consumer market.
Credit card transactions in China rose 30.9 percent last year over 2012 to 13.1 trillion yuan ($2.1 trillion), according to an industry group, the China Banking Association. It said 61 million new cards were issued in 2013.
At the same time, Internet companies such as Alibaba Group and Tencent Holdings Ltd. are launching mobile payment services that might compete with credit cards.
Despite their lack of market access, foreign credit card companies are promoting themselves to Chinese consumers who can use their cards abroad.
Visa Inc. was a sponsor of the 2008 Beijing Olympics and Mastercard Inc. paid to have a former Olympic sports facility renamed the Mastercard Center.