NEW YORK—U.S.-based payment card companies, including American Express, Mastercard and Visa, are preparing to submit license requests to operate in China within months.
But they will be waiting for a while to issue plastic in China, as it may take as long as two years or more for the companies to clear all official scrutiny, including from banking regulators, and for them to pass a security review, as well as meet other conditions, reported Reuters.
“The move comes against a backdrop of growing economic friction between China and the United States. U.S. payment network operators have been waiting for more than a decade to get access to China. It is set to become the world's largest bank card market by 2020, when the number of cards in circulation is forecast to rise to nine billion from six billion in 2016,” Reuters noted.
China first agreed in 2015 to open the card market to local and foreign businesses, a move triggered by a 2012 World Trade Organization ruling. However, foreign card companies have been unable to set up local operations in the absence of a clear roadmap from Chinese authorities, Reuters stated.
In May, Beijing and Washington agreed to a July 16 deadline for China to issue "necessary guidelines" for the launch of local operations by U.S. payment network operators, leading to "full and prompt market access," noted Reuters.