Imagine waiting 40 years for a single permit that prevents you from unlocking your full potential. Yesterday, however, that wait came to an end.
That is exactly what happened on Tuesday to $V, which received approval from the People's Bank of China to establish a locally registered bank card clearing institution.
Visa has been operating in China for over 40 years, but domestic yuan payments were dominated by the state-owned UnionPay. Visa first applied for a license back in July 2017, and in the meantime $AXP and $MA overtook it by entering the market through joint ventures with Chinese partners.
For now, Visa only has approval, not yet a license. Visa has one year to complete preparations, during which it must build local technology and data infrastructure and pass inspections by the central bank and the NFRA regulator.
The timing is not coincidental. The approval comes after the September summit between Trump and Xi Jinping.
China has over 10 billion bank cards, but everyday payments are dominated by WeChat and Alipay apps. Data from $AXP and $MA show that the path to gaining a larger market share in this country is very slow.
In any case, the stock is reacting very positively. Since October 5, $V shares are up 10.2%, and today before the market opens they are rising to a new all-time high and approaching the $400 mark.
