A CHINESE rule change will come into force today, allowing foreign payments firms such as Visa and Mastercard to apply for licences to process domestic bank card transactions.
Following approval, the firms will be able to clear transactions that until now were monopolised by state-backed China Union Pay.
The regulation change follows a 2012 ruling by the World Trade Organisation in favour of the US, after it complained about China’s closed payments market.
However, there are a number of hoops that prospective licensees must jump through, including having 1bn yuan (£105m) in capital. Analysts at investment bank Jefferies believe it could take Visa and Mastercard between 18 and 24 months before they are able to begin clearing transactions.