International

Amex Obtains License For Chinese Card Service

American Express Cleared for China Card Service

Before a summit between China’s President Xi Jinping and U.S. President Donald Trump, American Express has received the go-ahead to open up card-clearing services in China. China’s central bank announced the approval on Friday (Nov. 9), The Wall Street Journal reported.

According to an official from Beijing quoted in WSJ, the deal was a “goodwill gesture” that was set to go out before the summit. The People’s Bank of China said the deal was “an important step” in the direction of liberalizing the clearing industry in the country.

American Express is said to have formed a joint venture with Lianlian Group, a FinTech company in the country, to get a payment network up and running. However, the companies still have to receive a business operating license, which is a separate approval. American Express has up to 15 months to create its clearing network, per regulators in the country. The company plans to work within that time frame, a spokesperson told WSJ.

China announced in 2015 that it would open its domestic processing market to outsiders, according to a report from Fox Business. China has about 6.7 billion bank cards in circulation, with government-owned UnionPay dominating the market with 90 percent market share, according to a Wall Street Journal report in April.

American Express and Lianlian Group have partnered since 2012. At that time, Amex licensed its Serve system to Lianlian so it could offer the ability for mobile phone users to top up minutes, pay bills and purchase other goods and services, according to an American Express press release.

As the largest non-banking, third-party payment service in China, Lianlian is committed to creating a global network and increasing acceptance of the renminbi, the Chinese currency, according to the company. Lianlian counts PayPal and Apple among its strategic partners. Barriers to American companies operating in China are so high that Chinese institutions dominate in many areas, especially in finance.

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