Authored by Ren Gulong (rengulong@anjielaw.com) at AnJie Law Firm
On 29 October 2014, the State Council decided to open the bank-card clearing business to both domestic and foreign investors in an effort to expand the opening up in financial sector, to promote payment innovation and to optimize consumption environment.
“All qualified domestic and overseas enterprises can file applications for setting up bank-card clearing institutions in China,” according to a statement of the State Council. The statement also released that foreign institutions that only provide cross-border transaction clearing services don’t need to set up institutions in China.
At present, China UnionPay (CUP) is the only bank-card clearing institution in China. The State Council’s decision may end up CUP’s dominance in the Chinese market.
US – China EPS Dispute
In fact, the United States has been urged the Chinese government to open the bank cards clearing market through the World Trade Organization (WTO). In September 2010, the United States filed a complaint to WTO Dispute Settlement Body (DSB), alleging that certain restrictions and requirements maintained by China pertaining to electronic payment services (EPS) for payment card transactions constitute impermissible market access restrictions or national treatment limitations on foreign suppliers of the services. A panel was established by the DSB and the panel report was adopted by DBS on 31 August 2012.