According to the World Bank, China ranks second in the list of countries receiving international remittances. Given that China is the Global Manufacturing Hub, and home to 1.37 billion people offering goods and services in varied industries, this statistic comes as no surprise.
If you are a business owner, chances are you have purchased goods or services from a vendor, freelancer or a marketplace, based in China. While the purchase of these goods or services are rather easy, the payment is often not as easy.
Many small and medium businesses are increasingly finding it difficult to participate in B2B e-commerce. This is simply because of high fees and long delays associated with transfers through traditional banking systems.
In addition, different regions in the receiving country may have different rules for money transfer. For example- Beijing and Shanghai have different banks. And if one needs to transfer money to both places, the process could be different in each instance.
Global trade is increasing daily and so is the number of businesses remitting international funds. By the year 2020, B2B digital transactions are expected to make up only 10% of all B2B sales.
So why do businesses still prefer traditional banks, over digital transactions?
International B2B payments are larger and more complex than payments made by individual consumers. Often, money sent to countries like China as part of business transactions are worth hundreds of thousands of dollars and involve payments for multi-items and shipments.
Simple electronic billing systems lack the precision and security to handle these situations.
Automating payments is a hard task given that it involves many steps and departments to send money online. The ability to send money online gets questioned because of the lack of a secure and hassle-free credit payment system.
However, the new era of digital technology has introduced a blockchain-based operating system for global payments, which enables hassle-free cross-border payments for businesses.
REMITR Business Payments is an online service that enables international payments.
REMITR Business Payments is a blockchain enabled payment platform that allows you to step away from the fog of wire transfers. This system facilitates fast, secure payments across the globe and provides trusted real-time verification of transactions. All without the need of multiple intermediary steps that are usually followed by banks while doing a wire transfer. The money paid out usually reaches the receiving party’s account within 1 business day through REMITR.
Here is why a secure online payment system should be the preferred method of payment for your business:
Sending money online with REMITR is easy compared to wired bank transfers – Wire transfers to China are cumbersome Wire transfers involving large international banks typically deal with a large volume of EFT (Electronic Fund Transfers) traffic and multiple hops. Add this to the sheer number of different banking systems in China and the process is next to impossible to manage.
On the other hand, a transaction can be easily made using an online payment platform that resolves the problem of having to choose different payment methods depending on whom you want to pay. It also reduces the high transfer costs associated with these payments.
Faster online transactions for B2B entities – Sending money to China over wire transfer relies on a centralized wire transfer network that uses the SWIFT messaging system and entails several layers of manual processing. This manual processing can take several days for settlements to happen.
The process of verification of credentials for the B2B entities is a repetitive process that is mandated every single time a transaction occurs. Payment platforms like REMITR enable sending money to China in 24 hours, destination agnostic, and in a secure manner. The platform eliminates the need for manual wire transfers and reconciliations.
The Chinese New Year celebrated recently saw folks sending and receiving money across borders for business and to loved ones. The sheer volume and the non-working days in China caused delays in payments and resulted in funds being parked in bank NOSTRO accounts for days. Whereas an online international payment option like Remitr ensures receipt of funds within 1 business day!
Pay money in local currency – The global trade is traditionally used to raising invoices and settling payments in USD. The USD payments get converted to local Chinese Yuan when the bank in China receives the USD wire. Conversion rates are dictated by the bank which puts the exporter at a serious disadvantage. By paying a CNY invoice the sender saves money by fulfilling a CNY payment in fewer dollars. Payments can be done in USD or CAD and get converted to CNY at better-than-bank rates. USD-CNY and CAD-CNY payments are made easy using an online payment platform like REMITR.
An affordable option for sending money to China online – Sending large amounts of money to enterprises overseas involves costly, time-consuming, paper-based manual processes. A blockchain-based processing service supports cross-border payments at much lower costs as it uses a distributed ledger to transfer payments in conventional currencies.
REMITR Business Payments offers a flat rate for sending money online overseas as opposed to high banking rates for money transfer. The transparency offered by a blockchain-based payment system ensures that the companies participating in the money transfer comply with all necessary security regulations.
Flexible payment options for B2B transactions – Sending money overseas using wired bank transfers can often be complicated due to currency exchange issues and restrictions such as business working hours. When you send money to China from Canada, if the transfer is initiated after bank working hours, the transaction will only be processed the next business day. This adds one day to an already long process.
On the contrary, payment systems like REMITR offer flexible payment options for sending money overseas. Clients making the payment are in control of the fund’s transfer as they can make a payment 24×7 with no restrictions.
Such flexibility also means that you can choose the best time to make the transfer based on exchange rates. Typically, for sending money overseas, transactions after 11 PM E.S.T offer the best value for money. Now, that’s another benefit a bank cannot provide!
Smart Technology to make secure payments – B2B payments made online have evolved from traditional wire transfers to latest trends like using e-wallets and more recently, mobile payment platforms. Blockchain technology is a reliable option that enables B2B participants to keep shared records thereby reducing cost, mitigating settlement risk and eliminating central points of failure that could occur when sending money to China.
Such technology provides a high level of privacy for both businesses, ensuring that transaction details are shared only among the involved participants. It eliminates the need for a third party to be involved or to take control of the trade. The distributed ledger maintained by a blockchain-based database is tamper-proof as the entries in the ledger are made only if the system validates them. It is impossible to forge an entry into the ledger, as it involves changes in many places across the system.
Cross-border B2B payment systems like REMITR Business Payments use the blockchain based operating system MoneyOS for global payments that enable payments to be made online at least five times faster and cheaper than a bank wire transfer. International payments made using REMITR Business Payments start at as low as $5 and the payments are sent out within one business day.
So now which method do you think your business should use when remitting funds to China the next time?