SHANGHAI • China will permit foreign companies to access its US$27 trillion (RM105.66 trillion) payments market, further opening up the world’s second-largest economy.
Foreign players can start applying for payment licences and will be treated the same as local firms, the People’s Bank of China (PBoC) said in a statement yesterday. Applicants must set up local units, establish payment infrastructure — including disaster recovery systems — and store client information domestically, the central bank said.
Any entrants to the Chinese market will also have to compete with the more than 260 firms that have received payment licences including Ant Financial Services Group’s Alipay and Tencent Holdings’s WeChat Pay.
Allowing foreign firms to enter the payment market with defined regulations helps boost innovation, creates a fair environment for competition, and improves the services of payment providers, the central bank said in the statement.
Some major Chinese players have expanded overseas and offered services to global users, it said, without naming any company. China’s payment firms processed US$27 trillion of transactions in 2017, a nine-fold surge from 2013, according to the central bank.
“Banking is the real sector that needs to be further opened up,” said Xia Le, chief Asia economist at Banco Bilbao Vizcaya Argentaria SA in Hong Kong. “That requires not only lift of policy barriers but also clearing of invisible barriers.”