(Yicai Global) Jan. 15 -- The People's Bank of China has refuted a newspaper report that claims it barred US credit card providers Visa and Mastercard from entering the Chinese mainland market without a local partner.
The PBOC has never intervened or asked foreign financial companies to set up joint ventures to conduct credit processing in China, state-backed National Business Daily reported yesterday, citing a central bank official.
Citing two unidentified people familiar with the application process, the UK's Financial Times reported on Jan. 13 that the PBOC has declined to acknowledge applications from Visa and Mastercard to process yuan payments, although they filed with the bank more than one year ago. The FT also cited a Reuters article from November 2017 that claimed China was pressuring the two to do business through joint ventures.
Foreign firms that seek to provide domestic and cross-border e-payment services for Chinese entities need to set up foreign-funded companies in China and obtain payment licenses, according to a central bank statement on May 19 last year. Foreign-funded companies are different from JVs.
The central bank didn't propose any requirement related to JVs during the whole process, the National Business Daily's report added, citing the PBOC official.
New York-headquartered Mastercard submitted its application in 2017, but withdrew it last June, while California's Visa withdrew its last January, but refiled three months later. The PBOC hasn't officially accepted Visa's submission because the bank has asked the firm to provide more paperwork, the report said, citing the official.
The PBOC has been actively pushing the opening up of China's bank card market, while improving service standards by introducing competitive mechanisms, the official added.
Editor: Emmi Laine