American Express (AmEx) (AXP) has been given the nod by China’s central bank to go ahead with a joint venture, making it the first foreign credit company to launch operations there.
The network clearing license for Express (Hangzhou) Technology Services Co., a joint venture between AmEx and LianLian DigiTech Co Ltd, was approved by The People’s Bank of China (PBOC), the central bank said in a statement this morning.
The statement said the move reflected China’s continued opening up of its financial industry.
The approval comes amid mounting US-China tensions and conflict over Beijing’s imposition of national security law in Hong Kong.
The application has been in the works since January, according to the PBOC, and will give AmEx access to China’s $27tn (£21.5tn) payments market.
AmEx said it expects to begin processing transactions later this year.
“This approval represents an important step forward in our long-term growth strategy and is an historic moment, not only for American Express but for the continued growth and development of the payments industry in mainland China,” Stephen J. Squeri, chairman and CEO of AmEx, said.
Mastercard (MA.MX) also had a joint venture approved earlier this year, according to Reuters, but this was only to conduct bank card clearing operations in the country. The company has not yet had a network clearing license approved.
Visa’s (V) application for the same permissions is still pending approval, having been submitted in 2018.
It has taken a decade of lobbying for payments services to gain access to China’s market. Now foreign players are gaining access to the world’s biggest bank card market.