Visa Gets Approval to Enter China... Could It Break UnionPay's Monopoly? [Click e-Stock]

Daishin Securities: "Limited short-term impact... potential medium- to long-term growth driver"

Daishin Securities said on October 14 that the short-term impact on earnings would be limited, but that Visa, the U.S. company that operates credit and debit card payment networks, could gain a new growth driver in the medium to long term. The comments came after Visa received approval from Chinese authorities to begin preparing to offer services in China. Daishin Securities did not issue an investment rating or target price.

Visa card. Reuters-Yonhap.

The approval Visa received allows it to begin preparing for domestic business in China. This means Visa can continue the steps needed to launch a bank card clearing business in the country, handling payment authorization and settlement.

Until now, China’s card payment network has been dominated by UnionPay. Foreign operators such as Visa have handled only cross-border transactions. “This approval is significant because it opens the first official path for Visa to enter China’s domestic payment infrastructure directly,” said Cho Jae-woon, a researcher at Daishin Securities.

However, Visa has only qualified to reach the starting line. To begin actual operations, it must clear several hurdles, including obtaining a clearing license, building systems, and securing merchant and bank networks. China’s payment market has opened slowly, and Visa’s contribution from China has so far been limited.

Daishin Securities noted that “once the domestic clearing business gets underway in earnest, it could become a new growth driver that complements Visa’s reliance on cross-border transactions, but it is likely to take considerable time for the impact to show up in revenue figures.”

Researcher Cho said the approval was symbolically significant as it marked another step forward for Visa in its relationship with Chinese regulators, but predicted it was unlikely to have a major effect on the stock price and would most likely be viewed as neutral news in the short term.

Cho said, “It will be important to watch when Visa actually obtains a clearing license and whether the company provides guidance on the scale of its business launch in China.”

He added, “Other factors to monitor include growth trends in existing drivers such as value-added services, commerce, and payment management solutions, as well as whether the burden of incentives paid to clients such as card issuers and banks increases.”

This content was produced with the assistance of AI translation services.