China will open up its market for bank card clearing transactions to foreign players.
Currently Visa and Mastercard piggyback their services on China's UnionPay when accepting yuan payments and pay network access fees.
Rules and regulations have yet to be determined regarding opening up the market which was valued at $6.84 trillion last year.
Shares in both Visa and Mastercard have surged in value since the announcement.
China has announced it will open up its market for clearing domestic bank card transactions, a move that should allow foreign players such as Visa Inc and MasterCard Inc direct access to a market valued at $6.84 trillion last year. Foreign firms will be able to set up their own clearing companies in China and apply to the central bank for licenses for bank card clearing businesses from June 1, the State Council said on its website on Wednesday. The measure is set to end a near monopoly held by domestic champion China UnionPay Co Ltd, and allow Visa and MasterCard, the world's two largest credit and debit card suppliers, to challenge the state behemoth.