Stock accounts hit fresh high in bull market

2015-04-22

Logos of China UnionPay are seen on bank cards in this file photo illustration taken in Beijing Dec 5, 2013. [Photo/Agencies]

BEIJING - China's State Council announced detailed regulations to widen the market for bankcard clearing services, further opening the financial sector.

 Starting from June 1, China will implement access management on bank card clearinginstitutions and issue licenses to domestic or foreign companies qualified to set up bank cardclearing institutions, the State Council said in a statement.

Companies with a standard bank card clearing system and a registered capital no less than onebillion yuan ($163 million) are qualified to apply to conduct bank card clearing services in Chinaand should follow the industry rules, said the statement.

Clearing companies connect banks, shops and card users together and settle transactions byturning the promise of payment into actual transfer of money from one bank to another. Theirprofits come mainly by charging commission.

Currently, only China UnionPay Co, the national bank card association founded in 2002, isapproved by the People's Bank of China to provide clearing services for bank card transactionsin the country.

China promised to reform its payments clearing market in 2012 after the United States filed acomplaint to the World Trade Organization accusing China of discriminating against foreignfirms.

At an executive meeting of the State Council last October, China decided to allow domestic andforeign companies that meet certain requirements to apply to set up bank card transactionclearing institutions.

Market insiders believe that the upcoming foreign penetration is expected to further raisecompetition in the business as "third party payment" companies, Alibaba's Alipay in particular,boasting convenient and free online payment are already eating into the user base of traditionalcard transactions.