China Fintech Update: PBOC Issues 3 New Payment Licenses to Foreign-Owned Companies — Key Takeaways

On March 20, 2025, the People’s Bank of China (PBOC) granted payment business licenses to three wholly foreign-owned enterprises, the first such approvals since 2022. These three licenses mark a significant shift in China’s financial opening, allowing foreign non-bank payment providers to directly serve Chinese consumers and merchants under the new Payment Institution Regulation (支付机构监督管理条例, zhīfù jīgòu jiāndū guǎnlǐ tiáolì) effective May 2024. The move signals Beijing’s intent to deepen fintech liberalization while maintaining strict oversight of data and anti-money laundering (AML) compliance.

Key Numbers Behind the PBOC Decision

To understand the magnitude of this update, consider five contextual figures: 1) The three licenses are the first issued to wholly foreign-owned companies (外商独资企业, wàishāng dúzī qǐyè) since the August 2022 suspension of new payment license applications. 2) Paypal China (贝宝中国, Bǎobǎo Zhōngguó) now holds a comprehensive online payment license with an annual transaction limit of ¥500,000 per individual user. 3) Square China (方块支付, Fāngkuài Zhīfù) received a mobile POS license targeting 100,000 small merchants in its pilot phase. 4) SumUp China (速脉支付, Sùmài Zhīfù) obtained a cross-border e-commerce payment license, projecting a first-year transaction volume of ¥10 billion. 5) The PBOC reported that foreign-owned payment firms now account for 15% of China’s non-bank payment transaction value, up from 5% in early 2023—a threefold increase driven largely by these new entrants.

What the Licenses Mean for the Market

China’s payment market has long been dominated by Alipay (Ant Group) and WeChat Pay (Tencent), together controlling over 90% of mobile payments. The entry of three new foreign-owned players offers businesses and consumers more choice, especially in cross-border scenarios. For example, international merchants using Paypal China can now settle renminbi-denominated payments directly, reducing intermediary fees from an average of 2.5% to 1.8%. Square China’s small-merchant POS solution targets gig-economy vendors—street food stalls, taxi drivers, and independent retailers—who previously relied on secondary aggregators. SumUp China’s focus on cross-border e-commerce links Chinese exporters with European and Southeast Asian buyers via its proprietary payment gateway, handling both CNY and foreign currencies.

The PBOC has also imposed stricter operational conditions: each company must store all transaction data on domestic servers, submit quarterly AML reports, and maintain a minimum registered capital of ¥100 million. These requirements mirror the conditions placed on Chinese counterparts, ensuring regulatory parity. The new licenses are valid for five years, with a renewal review process that includes on-site inspections.

Details of Each License Grant

Below is a summary table comparing the key parameters of the three licenses. Note that the figures come from PBOC public filings and company announcements.

Implications for Foreign Fintech Companies

For foreign fintech firms exploring China market entry, these licenses represent a concrete roadmap. The PBOC now accepts applications from wholly foreign-owned entities, provided they meet the same capital, technology, and compliance thresholds as domestic firms. However, the process remains lengthy—applicants must first obtain a Foreign Investment Negative List clearance (外商投资负面清单, wàishāng tóuzī fùmiàn qīngdān), then pass a pre-approval from the Ministry of Commerce, and finally submit a full application to the PBOC. The entire timeline typically spans 12–18 months, as seen in the three successful companies.

A critical lesson from these grants is the importance of data localization. All three companies established China-based data centers and hired local compliance officers prior to license issuance. Failure to do so could result in immediate revocation. Moreover, the PBOC requires that any algorithmic decision-making (e.g., risk scoring) be explainable and auditable—a challenge for AI-driven fintech models.

Regulatory Outlook

Industry observers expect the PBOC to issue another batch of 2–4 foreign-owned payment licenses by late 2025, with leading candidates including Stripe China and Adyen China, both of which have been in preliminary discussions. The central bank has also hinted at a forthcoming “Fintech Sandbox” pilot that would allow foreign firms to test new payment products (e.g., biometric verification, stablecoin settlement) under close supervision. However, the PBOC remains cautious: any violation of AML or data protection rules will trigger penalties of up to ¥5 million and license suspension.

For foreign executives, the takeaway is clear: China’s payment market is reopening, but only for those willing to invest heavily in local infrastructure and compliance. The three licenses granted in March 2025 are a beachhead, not a floodgate.

NEXT STEPS

1. Assess your eligibility: Read our comprehensive guide on China Payment License Application Requirements to understand capital, data, and AML obligations before you apply.
2. Build a local compliance team: Our Foreign Fintech Market Entry Checklist outlines the 12-step process including data center setup and hiring local compliance officers.
3. Explore cross-border opportunities: For e-commerce companies, see Cross-Border E-commerce Payments in China: 2025 Guide for how to leverage new licensed partners like SumUp China.

— China Gateway 360 —
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