American Express has become the first foreign payments network to receive a bank card clearing licence to begin processing local transactions in China.

American Express operates a joint venture (JV) in the country under the name Express (Hangzhou) Technology Services Company Limited (Express Company).

The card giant operates the JV in collaboration with Chinese fintech services firm Lianlian DigiTech.

Express Company has received the network clearance nod from the People’s Bank of China (PBOC), the country’s central bank.

As a result, Express Company has become the first foreign institution to be licenced to process RMB transactions for China’s $27trn market.

The company is expected to begin clearing services within six months. It has already created a network to clear domestic transactions charged on American Express cards.

This network is also said to be compatible with key mobile wallets in the country and will process both online and offline payment transactions.

Express Company CEO Walter Liu said: “We will offer our partners differentiated services by bringing together the best from American Express and Lianlian.”

American Express chairman and CEO Stephen Squeri said: “This approval represents an important step forward in our long-term growth strategy and is a historic moment, not only for American Express but for the continued growth and development of the payments industry in mainland China.”

LianLian DigiTech chairman Zhengyu Zhang said: “We are confident that our joint venture with American Express will provide more diversified bank card services to consumers and commercial customers in and outside of China.”