Visa's Wholly-owned Entry into China: A "Catfish" or a Litmus Test for the Payment and Clearing Industry?

What Visa has obtained is not an "access pass", but an "examination admission ticket". Whether it can pass the test depends on whether it can deliver satisfactory answers in terms of data security, system compliance, and localized services. For UnionPay and Chinese-funded banks, the real challenge has never been foreign competition, but whether they can secure a seat at the table in the rule-making of global payment and clearing.

On October 13, 2026, the People's Bank of China issued an official announcement, confirming that global payment giant Visa has been formally approved to prepare for the establishment of a bank card clearing institution within Chinese mainland. Different from American Express six years ago and Mastercard two years ago, which "entered China via a roundabout way" through joint ventures, Visa has become the first bank card clearing institution within Chinese mainland to apply in the form of wholly foreign-owned enterprise.

The news immediately sparked a public outcry. However, amid the hype, a calm analysis is more needed: behind this "examination admission ticket", is it a milestone breakthrough in financial opening-up, or a carefully designed "stress test"? When the wholly foreign-owned clearing institution goes head-to-head with China UnionPay, what on earth does it mean for China's banking sector and even the entire financial system?

01 The Hidden Logic Behind "Wholly Foreign-owned"

To understand the significance of Visa's entry into China, we must first grasp the game logic behind the four characters of "wholly foreign-owned".

In 2015, the State Council decided to implement access management for bank card clearing institutions, announcing the official opening-up of China's bank card clearing market to the outside world. But opening-up does not mean laissez-faire. American Express took the joint venture path — it established Express Payments with Lianlian Digital, while Mastercard established Mastercard Nets Union through a joint venture with Nets Union Clearing. Neither of the two foreign parties achieved full ownership and control in their respective joint ventures. In contrast, Visa chose the wholly-owned model.

This is not a simple difference in paths. The fundamental difference between joint venture and wholly-owned model lies in the ownership of control. Under the joint venture model, Chinese shareholders retain certain say in board decision-making, data governance, system construction and other aspects, which is a prudent arrangement for "gradual opening-up". The wholly-owned model means that Visa can independently establish a legal person in Chinese mainland, build a clearing system independently, and formulate business rules independently, which undoubtedly puts forward higher security review requirements for regulators.

Wang Pengbo, chief analyst at Broad Consulting, pointed out that during the preparation period, the central bank will conduct a full review of the investors, actual controllers and security review. "The preparation approval does not mean that the business license will definitely be obtained in the end." This means that allowing wholly-owned preparation is a gesture of opening-up, but whether Visa can finally start business depends on whether it can pass a series of strict tests such as data security and system compliance.

From the macro background, Visa's approval this time is by no means accidental. China Media Group's report clearly pointed out that this approval is "related to Sino-US economic and trade relations" — the recent meeting between the heads of state of China and the United States reached eight consensus outcomes, and Sino-US economic and trade consultations made positive progress. Visa's approval for preparation is a "specific measure to implement the outcomes of Sino-US economic and trade consultations". In other words, this "examination admission ticket" is not only a signal flare of financial opening-up, but also a piece on the chessboard of Sino-US games.

02 UnionPay's "Defense Battle" and Visa's "Offensive Tactics"

What does the successive entry of foreign card organizations into China mean for UnionPay?

The reality is cruel. According to analysis by Liu Gang, founder of Payment Industry Network, the domestic clearing market pattern will gradually evolve from the tripartite pattern of "UnionPay + American Express + Mastercard Nets Union" to four-subject competition, but "in the short term, UnionPay is still the absolute main force of bank card clearing within Chinese mainland". The analysis of Broad Consulting also believes that the basic market of the domestic bank card clearing market has long been solidified, UnionPay firmly occupies the local mainstream market, and the stock space left for new entrants is very limited.

Figures are more convincing. By the end of 2025, the number of bank cards in circulation of major global brands exceeded 19 billion, and UnionPay's acceptance network within Chinese mainland covers almost all POS terminals and ATM devices. This infrastructure-level penetration cannot be shaken overnight.

But UnionPay is not resting easy. The real threat does not lie in the competition for the stock market, but in the loss of high-end customers and cross-border payment scenarios. Visa has an annual total payment transaction volume of more than 14.2 trillion US dollars globally, and its brand premium has natural advantages in fields such as business travel, high-end consumption, and cross-border study abroad. Once Visa obtains the RMB clearing license, domestic card issuers are very likely to launch high-end RMB credit cards under the Visa brand, directly diverting UnionPay's high-quality customers.

More importantly, Visa can "get rid of the previous cooperation model that relied on dual-label cards, more directly bind domestic card issuers and acquirers, and tap differentiated scenarios such as cross-border business and outbound consumption". In the past, the "dual-label card" cooperation model between UnionPay and Visa allowed both parties to share benefits, but it also restricted the independence of their respective brands. After becoming wholly-owned, Visa can, like Mastercard, promote banks to issue independent single-label card products, completely "separate" from UnionPay.

So what is UnionPay doing? The answer is "taking the offensive as a defensive measure". In recent years, UnionPay has accelerated its global layout. Its acceptance network has covered 183 countries and regions around the world, more than 100 million merchants overseas, more than 100 markets support UnionPay mobile payment services, and local card issuance services have been launched in 85 countries and regions. UnionPay is vigorously promoting QR code interconnection and interoperability cooperation with local payment networks in multiple regions overseas, to hedge the competitive pressure of "bringing in" through "going global".

The essence of this offensive and defensive battle is the competition for the right to speak in payment and clearing infrastructure. Whoever masters the standards will master the future.

03 The "Two-way Rush" of Chinese-funded Banks

The impact of Visa's entry into China on commercial banks is far more profound than "having one more card organization to choose from".

For card issuers, Visa's wholly-owned model means that banks have more negotiation chips. In the past, UnionPay was the only domestic RMB clearing channel, and banks had limited room for bargaining in terms of rates and brand cooperation. Now that American Express, Mastercard and Visa have entered the market one after another, banks can make differentiated choices among different card organizations, and even reduce their dependence on a single card organization through a "multi-brand strategy".

But the deeper impact lies in the internationalization process of Chinese-funded banks themselves.

Take Bank of China as an example. By the end of 2025, BOC had 533 overseas branches, covering 64 countries and regions around the world, including 45 countries under the Belt and Road Initiative. In 2025, the operating revenue of overseas institutions increased by 12.1% year on year, and the contribution of operating revenue from overseas comprehensive operating companies was close to 23.8%. BOC also assisted the Guinea subsidiary of West African Commercial Bank and Sweden's SEB to access the Cross-border Interbank Payment System, realizing the first country coverage of the CIPS system in Guinea.

Then look at China Construction Bank. In 2025, CCB's cross-border RMB settlement volume reached 6.5 trillion yuan, and the balance of international business credit was 1.45 trillion yuan. In July 2026, CCB linked its Xiamen Branch and Labuan Branch in Malaysia to launch the country's first cross-border remittance and settlement of digital RMB between China and Malaysia — the payment for durians can be transferred from Xiamen to Malaysian suppliers in about 30 minutes, realizing direct exchange between digital RMB and ringgit. CCB also completed cross-border remittance under trade terms between Chinese and Swiss enterprises through the "Digital RMB Reach" cross-border digital RMB settlement platform, marking that the digital RMB cross-border payment network has officially reached the European market.

Industrial and Commercial Bank of China was approved to act as RMB clearing bank in Turkey, and officially opened for business in November 2025, further promoting the upgrading of bilateral economic, trade and financial cooperation. Relying on the Multiple Central Bank Digital Currency Bridge, ICBC also innovatively launched a cross-border e-commerce payment solution for digital RMB, helping Yiwu Payment to be applied in Hong Kong, China, the Middle East, Southeast Asia and other regions successively.

These cases reveal a clear trend: the internationalization of Chinese-funded banks is upgrading from "following enterprises to go global" to "infrastructure construction". When new infrastructures such as RMB clearing banks, digital currency bridges, and cross-border QR code interconnection and interoperability are gradually rolled out, Chinese-funded banks are no longer just passively serving cross-border trade settlement, but beginning to participate in the formulation of global payment rules.

Visa's entry into China just provides new possibilities for this kind of "two-way rush". The entry of foreign card organizations forces Chinese-funded banks to improve their cross-border financial service capabilities; in turn, the increasingly mature international network of Chinese-funded banks also makes foreign institutions such as Visa must be more "down-to-earth" when developing business in the Chinese market.

04 The Deep Logic of Chinese Banking Industry Going Global

The significance of Visa's wholly-owned entry into China can be seen more clearly only in the overall game of China's financial industry opening-up.

Dong Ximiao, chief economist of China Merchants Union Consumer Finance, pointed out incisively: "Visa has a large market share and enters China's bank card clearing market in the form of wholly foreign-owned enterprise, which shows that the opening-up of China's bank card clearing market is a process of continuous expansion and gradual deepening, from small to large, from joint venture to foreign ownership."

This process has a clear timeline: UnionPay obtained the license in 2019, the joint venture of American Express opened for business in 2020, the joint venture of Mastercard Nets Union opened for business in 2024, and Visa started wholly-owned preparation in 2026. From "the only player" to "four-subject competition", China has completed the opening process that took many countries decades in just seven years.

But the pace of opening-up is well-considered. The regulator adheres to the principle of "approving one when it is mature", which essentially introduces diversified market entities under the premise of controllable risks. Bank card clearing institutions are at the core of financial infrastructure. They not only handle fund clearing, but also master a large amount of transaction data and financial information. Introducing wholly foreign-owned enterprises in this field requires not only courage, but also institutional confidence and regulatory capacity.

From a more macro perspective, the opening-up of China's banking industry is two-way. On the one hand, it is "bringing in" — international card organizations such as Visa, Mastercard and American Express enter China; on the other hand, it is "going global" — Chinese-funded banks are laying out along the Belt and Road, RMB clearing banks are landing around the world, and the CIPS system covers more and more countries and regions. This two-way flow is the true meaning of financial opening-up.

The RMB has become the largest settlement currency for China's cross-border receipts and payments, and the second largest trade financing currency in the world. However, Sun Fei, deputy director of the Institute of Finance under the Development Research Center of the State Council, also admitted that the share of RMB in global official foreign exchange reserves and trade financing "still has room for improvement", and China's right to speak on issues such as IMF quota reform and international regulatory standard formulation "still has a gap".

Visa's entry into China, on the surface, seems to be foreign "wolves are coming", but at a deep level, it is a sign that China's financial system is shifting from "passive defense" to "active opening-up". When China's payment and clearing infrastructure is strong enough and the regulatory capacity is mature enough, opening-up is no longer a risk, but an opportunity to force reform. As Liu Gang, founder of Payment Industry Network, said, healthy competition will "force local clearing institutions to continuously polish their products, optimize services, and drive the entire payment and clearing infrastructure to improve quality and upgrade".

05 Conclusion

Eight years ago, when American Express, as the first foreign card organization, was approved to enter China, the market was full of exclamations. Eight years later, Visa enters the market as a wholly-owned entity, and public opinion is more calm. This calmness comes from the strength and confidence of China's payment industry, as well as the institutional confidence in financial regulation.

What Visa has obtained is not an "access pass", but an "examination admission ticket". Whether it can pass the test depends on whether it can deliver satisfactory answers in terms of data security, system compliance, and localized services. For UnionPay and Chinese-funded banks, the real challenge has never been foreign competition, but whether they can secure a seat at the table in the rule-making of global payment and clearing.

The curtain of the payment and clearing market has just been raised. There are more and more players on the stage, but the best show is yet to come.

This article is from WeChat official account "Liujiu Finance" (ID: liujiucaijing69), written by Haohao, authorized by 36Kr for release.