Visa has announced that the People’s Bank of China (PBOC) has approved its Application to Prepare.
The People’s Bank of China (PBOC) has granted Visa permission to begin preparations to set up a local clearing house in China, allowing the U.S. payments giant to prepare for the launch of its long-awaited yuan clearing services.
While Visa’s approval only represents a preparatory process that facilitates the company’s legal and technical preparations needed to set up local infrastructure, Visa will still have to fulfill several regulatory requirements. Before it can start processing card transactions in the country.
Visa has not provided a specific timeline for the beginning of its commercial operations, but the company’s CEO Ryan McInerney has already labeled the new decision as one of the most significant developments in its 40-year operating history in China.
Visa openly links the Chinese regulator’s decision not only to economic factors but also to efforts by the United States and China to establish a constructive and strategically stable dialogue.
The reason Visa has spent decades pursuing this license lies in the enormous scale of the market. With a total transaction volume of 4.6 trillion cards, China has achieved a transaction volume of 963.6 trillion yuan (about 134 trillion dollars) in 2025. Experts believe that by the end of 2026 the total volume of payments in China will reach 47 trillion dollars.
Traditionally, the Chinese domestic card market was ruled by China UnionPay, a state-owned entity, while the operations of foreign competitors were limited to serving foreigners or processing international transactions.
Visa’s path into the Chinese market has proved difficult, involving the withdrawal of its initial applications in 2018 and their resubmission after regulatory rules were revised. Unlike its main competitors, Visa has chosen a fundamentally different market-entry strategy.
American Express became the first U.S. company to receive permission to conduct yuan clearing in 2020. However, it did so by establishing a joint venture, Express Company, with Chinese partner LianLian Pay.
Mastercard followed suit by pursuing a partnership strategy, establishing the joint venture Mastercard NUCC Information Technology with China’s state-owned clearing center, NUCC. It received its final license to launch domestic operations in late 2023. Visa, meanwhile, aims to operate through a wholly foreign-owned subsidiary without local co-owners. This gives it full control over its operations but significantly raises the regulatory bar.
While international giants spent years breaking through bureaucratic barriers, China’s retail market underwent a digital leap, effectively bypassing the era of plastic cards. Today, more than 80% of everyday payments in the country are made through mobile wallets using QR codes, while the duopoly of Alibaba’s Alipay and Tencent’s WeChat Pay dominates the retail segment. Most local merchants are optimized specifically for QR payments, meaning that installing conventional POS terminals for card payments would only add to their costs.
But the start of yuan operations at home provides Visa with two important opportunities: servicing big firms, multinational companies, and rich individuals using credit cards, and providing an efficient infrastructure for foreign tourists and residents.
If Visa successfully completes the final stage of the PBOC’s review, it will become China’s first fully independent foreign clearing institution. This will offer banks, businesses, and consumers a direct alternative to both the national UnionPay system and the joint ventures operated by Mastercard and American Express.
