China’s central bank approves first foreign-invested bank card clearinghouse

Source:Global Times Published: 2018/11/9 23:33:40

China's central bank has approved a joint venture (JV) clearinghouse between a US and Chinese firm, which experts say signals a concrete step in the opening up of the country's bank card market as well as finance sector.

The People's Bank of China (PBC), the country's central bank, approved Express (Hangzhou) Technology Services Co - American Express' Chinese JV - to prepare for clearinghouse operations in China, according to a statement published on PBC's website.

"The move is an important step forward in China's opening-up in the bank card market, which also underscores its efforts to improve two-way opening-up in the financial sector," the central bank said in a statement.

This is the first foreign clearinghouse allowed to operate in the Chinese mainland, which is also part of the Chinese government's measures to deepen reforms in the domestic financial sector, Dong Ximiao, executive director of Hengfeng Bank's research institute, told the Global Times. "It's also our commitment to further open up, which will help upgrade the country's overall bank card market," he said.

The entry of American Express in the Chinese market will give domestic consumers and financial institutions more choices, Dong noted. "Maybe in the near future, Chinese consumers could go shopping with American Express credit cards… it also shows that China's financial sector has become more competitive and we can introduce long-term capital and improve the business environment," he said.

By the end of 2017, China had issued 7.03 billion bank cards. That means each Chinese person has an average of five cards, according to an industry report issued in June.

In 2017, the number of transactions using bank cards rose 29.4 percent to 149 billion, worth 735 trillion yuan ($113 trillion), the report showed.

The central government has been preparing to allow more foreign institutions to enter the Chinese bank card market since 2015. However, greater competition is unlikely to lower bank card fees, Dong noted. "The average bank card fee in China is still lower than that of other major international bank cards," he added.



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