- American Express Company (NYSE: AXP) recently announced it is now the first foreign payment network to receive a clearing license in mainland China
American Express Company (NYSE: AXP) recently announced it is now the first foreign payment network to receive a clearing license in mainland China. Specifically, American Express is making this happen through a joint venture in mainland China called Express Hangzhou Technology Services Co. — which is the organization that received the approval from the People’s Bank of China for a network clearing license.
The Express Hangzhou joint venture was put together as part of a deal between American Express and Chinese financial services company Lianlian DigiTech Co. Local transactions are expected to start processing later this year.
To make this happen, Express Hangzhou built a network to clear domestic transactions charged on American Express branded cards. And it is also compatible with local key mobile wallet companies in China.
“We look forward to welcoming millions of new consumers, businesses, and merchants in China to American Express, as well as continuing to enhance our support for our global customers when they travel to the region,” said Stephen Squeri, chairman and CEO of American Express.
By enabling card companies to the economy in China, the country’s government officials have a broader plan to offer access to services like insurance, asset management services, and investment banking.
Another American financial company that signed a major deal in China is PayPal. The People’s Bank of China had approved of PayPal’s reported 70% equity stake in Guofubao Information Technology Co. last year.
Mastercard and Visa are both also pushing to expand in China. In February, Mastercard said that it received an in-principle approval from the central bank in China to build a rival card-clearing system and the company is aiming to apply for formal approval within a year. Visa is partners with Alipay and WeChat Pay. And Visa also has a co-branding deal with Tencent Holdings.
