What’s news: A China venture of American Express Co. (AmEx) started operations on Friday in the eastern city of Hangzhou, making the company the first foreign firm to provide bank card clearing services in one of the world’s largest payment markets.
What’s the background: Express (Hangzhou) Technology Services Co. is a 50-50 joint venture by AmEx and Chinese payment services provider LianLian DigiTech Co. Ltd.
In 2018, AmEx received initial approval from the People’s Bank of China to build a network in the nation. In June, the AmEx venture got final approval from the central bank to start running.
What’s the outlook: Although the approval is viewed as a win for the credit card giant, it is widely believed that AmEx will face a challenging environment, including fierce domestic competition from the likes of China UnionPay Co. Ltd., and a well-developed market for mobile payments.
Starting this month, the AmEx venture has launched bank card clearing services with partners including 16 commercial banks, three leading mobile payment platforms including Alipay and WeChat Pay, as well as some nonbanking payment services providers.
Related: AmEx Wins Clearing License for China’s $27 Trillion Market
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)
