On October 13, the People's Bank of China approved Visa Information Technology (Beijing) Co., Ltd. ("Visa") to prepare a bank card clearing institution.
With this, Visa has formally become the third international card organization to receive preparatory qualification, following American Express and Mastercard.
Visa CEO Ryan McInerney called the approval "another important milestone" for Visa's service to the Chinese market.
McInerney said Visa has participated in the development of China's payment industry for more than four decades and is a long-term contributor to the construction of the payment ecosystem. The company will advance its work in accordance with the regulations of the People's Bank of China in order to begin operations in the country as soon as possible.
Under the rules, Visa must complete preparations within the next year and then apply for a business license.
What Visa needs to solve next is how to get single-brand cards into Chinese consumers' daily payments as a commercial matter.
Transaction entry point after old cards exit
Around 2003, UnionPay-Visa dual-brand cards gradually became popular in China. Cardholders mainly used UnionPay for domestic spending and could use Visa for overseas spending.
But starting in late 2016, the issuance of new dual-brand card products was gradually tightened. By October 2026, although existing dual-brand cards could still be used, this channel connecting Visa with Chinese issuing banks and cardholders could no longer expand through new card issuance.
In its fiscal 2025 annual report, Visa disclosed that the exit of dual-brand cards had reduced its payment volume in China and affected net revenue from China.
The gradual contraction of the original transaction source has also given domestic clearing networks more urgent commercial significance.
As of fiscal 2025, Visa had partnered with domestic issuing banks to issue single-brand cards for cross-border use.
Starting in May 2025, several banks began chip upgrades for existing dual-brand cards. In January 2026, Visa supported Chinese cardholders in linking to Apple Pay, and later announced a cross-border remittance cooperation with UnionPay International.
However, these businesses maintained links in cross-border scenarios but could hardly enable single-brand cards to cover domestic RMB consumption. This approval for Visa to prepare a bank card clearing institution also gives Visa an opportunity to complete the local transaction link.
As the institution opens in the future, banks connect, and merchant acceptance is completed, RMB bank card transactions occurring domestically with single-brand cards may enter Visa's clearing network in China.
Visa itself does not issue credit cards. Issuing banks are responsible for credit granting, bookkeeping and bearing credit risk. Visa's planned domestic clearing network would send payment requests from the merchant side to the issuing bank and, after the transaction is approved, organize clearing and settlement.
Take a 100-yuan purchase as an example.
A consumer pays with a Visa single-brand card in their wallet. The acquirer sends the request into Visa's network and passes it to the issuing bank. After the bank approves it, the cardholder's statement records 100 yuan, and the merchant receives the payment after deductions.
Under current rules, for a 100-yuan credit card transaction, the cap on the issuing bank's service fee is 0.45 yuan, the acquirer charges a separate service fee, and the actual fee borne by the merchant is determined by agreements among the parties.
If Visa handles domestic clearing, it can charge network service fees to the issuing bank and the acquirer separately, with a combined cap of 0.065 yuan.
Previously, domestic dual-brand card transactions were processed through the UnionPay network, and UnionPay collected the network service fee. After Visa is approved to open and takes on domestic transactions for Visa single-brand cards, it can also earn clearing network revenue from such RMB consumption.
It is worth noting that this kind of transaction can be initiated from a wallet.
WeChat and Alipay provide important channels for international card organizations to enter Chinese residents' daily payment scenarios.
However, whether transactions after card linking can enter Visa's domestic clearing network still depends on specific business arrangements among the wallet, the issuing bank and the clearing institution.
Mastercard, another pioneer among international card organizations, has already set an example.
Industrial Bank's official website shows that "China Mastercard" single-brand dual-application credit cards can be linked to WeChat and Alipay and can also be used at Mastercard-branded terminals and QR code scenarios. Consumers pay by scanning as usual, and the card organization still has a chance to participate in back-end transactions.
What Visa will seek in the future is precisely the bank card clearing link behind the wallet.
The cost ledger of building a new network
Visitors to China swiping overseas Visa cards and linking foreign cards to domestic wallets has long existed. The new space indicated by this approval is handling RMB transactions for Visa single-brand cards issued by domestic banks after Visa opens.
To earn revenue from such transactions, Visa must first build the network.
The registered capital of a bank card clearing institution must be no less than 1 billion yuan, and Visa must also complete system testing, business rules, a risk control system and the connection of member institutions.
It is worth noting that Visa is wholly owned by Visa, and technology and operational investment are also led by Visa. By contrast, UnionPay Company and Mastercard NetsUnion were both established as joint ventures with Chinese and foreign shareholders.
Starting from the business model, banks will first calculate card issuance costs.
Cross-border benefits can attract travel customers, while daily payments still require local acceptance. Banks must bear customer acquisition, points and benefits, system transformation and customer service investment, while revenue comes only after cardholders use the cards.
Once cards are issued, they must also be linkable to commonly used wallets and be accepted by merchants. Insufficient coverage at any end—bank, wallet or merchant—will leave the network short of transactions.
This investment is taking place just as the credit card market is contracting.
At the end of 2025, the total number of bank cards nationwide rose to 10.217 billion, while credit cards and combined credit-debit cards stood at 696 million, down 31 million from the previous year and marking a fourth consecutive annual decline.
New card issuance no longer naturally brings incremental consumption. What Visa needs to win is for cardholders to link single-brand cards into wallets and repeatedly use them for local consumption, so that network service revenue generated by each transaction gradually covers the costs of building the network and acquiring customers.
The experience of forerunners provides a reference.
UnionPay Company's revenue in 2023 was about 329 million yuan, with a comprehensive loss of about 1.327 billion yuan. Its loss cannot be used to infer Visa's result, but it shows that there is still a distance between opening and generating sustainable revenue.
Mastercard NetsUnion demonstrated the speed of rolling out products and channels. It received its license in 2023 and opened in 2024.
At the time, Mastercard disclosed that as of May 2026, there were more than 270 China Mastercard products, which could be linked to more than 30 mainstream domestic wallets.
Card and wallet access is increasing, but it still cannot answer whether transactions are active.
Mastercard NetsUnion's domestic transaction volume and profit or loss have not yet been disclosed. In the future, Visa will likewise need active card volume, domestic transaction count and amount to test whether its investment has brought scale.
Visa's global operating revenue (net revenue) in fiscal 2025 was about 40 billion U.S. dollars, but that cannot be directly converted into returns in the Chinese market.
Service fee rates, credit card trends and the wallet landscape here all require it to redo its accounts transaction by transaction locally.
In the coming year, the progress of the first batch of partner banks, system testing and the acceptance network will determine when Visa applies to open. After obtaining a license, whether single-brand cards can enter wallets and daily consumption will give the nine-year wait a commercial answer that can be accounted for.
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