March 21, 2018 / 8:54 AM / a month ago

PBOC sets out rules for foreign third-party payment firms to operate in China

BEIJING (Reuters) - China’s central bank said on Wednesday it was opening the country’s domestic market to foreign third-party electronic payment firms, in a move intended to promote competition in the retail payments industry.

FILE PHOTO: A Chinese national flag flutters outside the headquarters of the People's Bank of China, the Chinese central bank, in Beijing, China April 3, 2014. B REUTERS/Petar Kujundzic/File Photo

Foreign third-party firms will be required to set up a local business in order to apply for a payment services license, the People’s Bank of China (PBOC) said in a statement on its website, without specifying the capitalization requirements for the Chinese firm.

The PBOC notice also requires foreign third-party electronic payment firms to store client data and other financial information in China. The rules mirror central bank regulations for foreign bank card companies seeking licenses to operate in the domestic market.

In 2016 China opened its market to foreign bank companies, potentially giving groups like Visa Inc (V.N) and MasterCard (MA.N) access to what is expected to become the world’s No.1 bank card market by 2020. But the central bank also required foreign service providers to set up technology and data infrastructure and back-up data systems in China.

Reuters reported in November last year that China was pressing foreign payment card companies to form local joint ventures for onshore operations, instead of fully foreign-owned ones.

    Reporting by Stella Qiu and Matthew Miller; Editing by Kim Coghill

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