The Chinese government is not formally considering Visa and Mastercard’s year-old application to process payments inside China, another signal of China’s almost constantly changing regulatory posture toward the American card brands.
The People’s Bank of China has not acknowledged Visa and Mastercard’s 2018 application, reports the Financial Times, which cited anonymous sources. The central bank's acknowledgement of the application would force it to make a decision within 90 days.
A translation of Chinese media site Wall Street CN contends Mastercard withdrew its application and Visa’s application lacked materials. Wall StreetCN also disputes media reports that China was requiring Visa and Mastercard to set up a joint venture with local parties to operate inside China.
Traffic passes the China Central Television (CCTV) headquarters, right, and other commercial buildings in the central business district in Beijing, China, on Monday, Sept. 8, 2014. China is scheduled to release figures on consumer and producer prices on Sept. 11. Photographer: Brent Lewin/Bloomberg
Brent Lewin/Bloomberg
Visa and Mastercard did not return requests for comment by deadline.
It’s the latest in a series of regulatory headwinds for Visa and Mastercard in China. The Chinese government expressed an openness to the card brands as early as 2015, while some overtures to U.S. payment companies date as far back as 2001.
While Visa and Mastercard both expressed an interest in opening markets in China, the 2015 move stalled over requirements of local investments of more than $150 million and a substantial local presence to process payments.
China promised to clarify those requirements, but in 2017 actually added more requirements for external payment companies.
In 2018, it appeared China was lightening regulations again by rewarding a preliminary approval to WorldFirst, though there’s been little movement since and the trade dispute between the U.S. and China has further complicated U.S. corporate attempts to enter the domestic Chinese payment market market.
The American payments companies have long viewed China and its population as a key global market, but they continue to lose potential ground to the powerful Alipay and WeChat Pay mobile wallets, in addition to the UnionPay card's continued growth.
The online consumer lender beat revenue expectations in the first quarter, but its net income was dragged down by larger provisions that the company attributed to tariff "uncertainty."
The card processor came up short on expected profits but hit analysts' estimates on revenue in the second quarter of its fiscal 2025. CEO Ryan McInerney said growth in payments volume, cross-border volume and processed transactions were strong even in the face of shaky economic conditions.
At a House subcommittee hearing, Republicans proposed "tailoring" regulations for community banks while Democrats railed against Trump's tariffs and cuts to the Consumer Financial Protection Bureau.
Senate Banking Committee ranking member Elizabeth Warren, D-Mass., and House Financial Services Committee ranking member Maxine Waters, D-Calif., urged the National Credit Union Administration's Inspector general to look into President Trump's removal of two board members.
Rapid deregulation, tariffs and a campaign to dismantle the Consumer Financial Protection Bureau have defined the early days of President Donald Trump's second term for bankers.
