China will expand the market for clearing domestic bank card transactions as part of the efforts to open up the country’s financial sector.
The decision has been taken by top leaders to allow local and foreign firms that meet the criteria to set up their own clearing institutions, said the State Council, providing no further details.
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Currently, the national bank card association China UnionPay is the only bank to have access to the country’s electronic payments market, and is reportedly enjoying an illegal monopoly on handling credit and debit cards payments made in yuan.
Visa and Mastercard welcomed the country’s plans to ease restrictions on clearing bank card transactions, as the move gives electronic-payment processors access to the fast-growing market worth over $1 trillion a year, reported Reuters.
In 2012, China’s bank card transactions rose 37% year-on-year to CNY21.8 trillion ($3.6 trillion).
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