American Express in cooperation with Chinese fin-tech company Zhejiang Lianlian Technology Co, formed a joint venture named Liantong (Hangzhou) Technology Services Co, which was successfully approved by the central bank, as a clearinghouse in Mainland China. Therefore, in the future, Union Pay will not be the only one occupying the bankcard payment market.
Normally, after a consumer uses a bank card to make a withdrawal or deposit, or pay via a POS machine, the whole operation is finished after the balance in her/his account readjusts. However, for the merchant, the clearing operation will be handled by Union Pay, no matter what bank card the consumer’s using, and usually some commission will be charged after using the POS—because Union Pay is currently the only eligible clearinghouse in Mainland China. However, the founding of Lianlian means it will be doing the same thing as Union Pay. Soon, customers can also choose to pay with their American Express card directly without going through Union Pay.