American Express has secured preparatory approval from the People’s Bank of China (PBOC) for a clearing and settlement licence in mainland China.

The central bank approval will enable the card giant to build a network business for processing domestic, RMB transactions via the JV.

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American Express is said to be the first company to build such network in the country.

To build the network company, American Express formed a joint venture (JV) with Chinese fintech services company LianLian.

Registered as Express Technology Services, the JV will domestically clear and settle the charges on American Express cards.

American Express chairman and CEO Stephen Squeri said: “We are pleased to be the first foreign payments network allowed to build a network in mainland China.

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“This is an important next step toward being able to bring the benefits and services of our global network to Chinese customers and expanding the ability of our global card members to use their American Express Cards in mainland China.”

LianLian chairman Dixon Zhang said: “LianLian will work together with American Express to seize this opportunity and do all the necessary preparatory work in accordance with relevant laws and regulations and with the guidance and assistance of the regulatory authorities.”

PBOC said that the JV is required to complete operation preparations within a year and seek approval from the central bank before starting the card clearance business.

The central bank added that the approval is a milestone in opening up the country’s bank card market to foreign investors.