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Where to Find China Freelancers

By สุวรรณา วิเศษแก้ว (Own work) [CC BY-SA 4.0], via Wikimedia Commons

One of Remitsy’s key use cases is making payments to freelancers in China who are providing services to companies abroad. Freelancing and “the gig economy” are fast growing spaces, but engaging in these relationships across borders can cause all sorts of problems with payments. Small transactions to personal accounts in China is exactly where our bitcoin conversion technology excels.

But enough about us – with so many of our clients making payments to freelancers in China, we thought we might share some of our China expertise on how to find freelancers here. There’s a lot of platforms out there these days and it can be difficult to navigate for the newcomer.

Something you don’t already know

Rather than create a list of global freelancing platforms you already know – the likes of Upwork, Freelancer and PeoplePerHour – we thought you might like to discover a few of the less-well-known platforms, especially those with a China focus.

So we’ve compiled a list of the foremost platforms for hiring freelancers in China, most of them based in China itself. This also means that many of the sites are offered in Chinese-language only…and you’ll need someone on your team who can speak Chinese to navigate them. But these days, for companies doing business with China, that isn’t too unusual!

One important thing to note about Chinese freelancing platforms: they tend to offer services from a mixture of both small agencies and individual freelancers. So depending on your requirements, make sure you take note of what kind of entity you are engaging with!

Read on for our list (we’ll try to keep this updated as we hear of interesting new platforms!).

Zhubajie
Witmart (Zhubajie) is the biggest outsourcing platform in China, connecting startups with freelancers and agencies providing a wide variety of services. Currently the majority of projects listed on are related to graphic design, website production, and circuit design. A warning to freelancers listing services there: Witmart take a 20% fee on all payments, which is a bit steep compared to other platforms!
Language: English + Chinese

680
680.com (formerly Vike China) specialises in software and design services, for example: trademark registration, web design (especially Taobao store fronts) and logo design. While probably the largest platform in China for this sector, it still uses the traditional method of selecting candidates – based on submitted profile only – vs. most of the other platforms which have moved to variations on the crowdsourcing model (think: 99designs).
Language: Chinese

Epwk
Epwk (Yipin Weike), unlike some of the more traditional freelancer platforms, has chosen to not take a cut of freelancers fees on the site. Instead it has taken the route of providing paid value-added services. Their focus is on helping companies find creatives, designers and service agencies (both studios & individuals). Multiple selection methods available.
Language: Chinese

Renwuyi
Renwuyi is a freelancer aggregator – like Skyscanner but for outsourcing. You’ll find most of China’s major platforms listing jobs here. They’re also offering a fairly aggressive referral scheme – if you register accounts with Witmart, Epwk or Freelancer via Renwuyi’s promo link, they will credit your account with 100% of their referral fee.
Language: Chinese

Dakun
Dakun is a new spinoff from premier startup recruitment platform Lagou. As a huge fan of Lagou (some of our best team members joined through their platform), I’m expecting big things from their new foray into the freelancer market. However, Dakun only opened at the beginning of 2016 and at the moment seems to be aimed at the higher end of the market, offering a small selection of industry experts. With high prices and few projects listed, it may take some time to take off, but I’d be confident of the quality of service provided.
Language: Chinese

Cadence
We’ve personally used Cadence (formerly SeekPanda) before for simultaneous interpretation at one of our Bitcoin Meetup events in Beijing. The platform connects you with multiple freelance interpreters working in China. They provide excellent customer service and an accurate match of skill sets.
Language: English + Chinese

freelancer
FreelancerChina (their focus is in the name!)  has also focus on the developer market, and has been localised fairly well for an international English-speaking audience. After submitting your project requirements, CVs of the developers are sent across to allow you to select the most suitable developer for the job.
Language: English + Chinese

 %e6%99%ba%e5%9f%8e
TaskCity (Zhicheng) aims to open up Chinese software outsourcing to the global market. With an international team and perspective, they claim to have experience in helping smooth the process of connecting international companies with Chinese expertise.
Language: English + Chinese

Chuangyiwang
Toidea (Chuangyi Wang) is all about innovation and design. If you are designing a logo, trying to come up with a Chinese slogan, or any type of branding, this is the place to find some creatives!
Language: Chinese

Ziwork
Ziwork (Zike) is a place where you can find Chinese freelancers working in design, technology, operations, marketing, prototyping or even financial services. Freelancers on Ziwork are in the high-end talent bracket and are paid by the hour.
Language: Chinese

soho-task-logo
Soho Task is another freelancer platform where fees are charged by the hour. On the Soho Task platform you can find IT freelancers, programmers, designers, product managers, administrative, financial or legal personnel. And can also find some outstanding Chinese students here…in case you are looking for somebody to do your homework 🙂
Language: Chinese

91y8
On the 91y8 (91Waibao) website you can find agents who can help you with app development, website construction, animation, film production, game design and other similar services.
Language: Chinese

Taskcn
Taskcn (Renwu Zhongguo) can help you with finding freelancers working in professional logo design, advertising / packaging design, web design, activity planning, translation, or creating slogan / name for your company or product.
Language: Chinese

Neil WoodfineNeil Woodfine

The Pitfalls of Sending Money to China

Remitsy CEO Richard Bensberg recently spoke with Renaud Anjoran. Renaud runs the excellent QualityInspection blog where he writes about the many issues faced by companies sourcing products from China.

On his blog you can find general advice for importers, with a special focus on quality management, helping small and medium-sized buyers understand their suppliers better, adopt the right strategies, and use the right tools. Renaud himself has seen his fair share of payment issues and so was keen to get our comments on the topic.

Sending money to China is often complicated because inefficient archaic international payments

When you are sending money to China via international bank wire it is expensive, slow and complicated process.

In the interview, Richard explains there is no such thing as a “typical payment”. The method used to process an international payment still varies a lot depending on the input and output currency, and the countries and banks involved.

Domestic payments are generally quite efficient, but international payments – which are still using the SWIFT network – are slow:

“SWIFT was originally built in 1973 – long before the creation of the Internet. When money is sent overseas, physical assets don’t have to move. Instead, SWIFT acts as a messaging system between banks to clarify the ownership of assets on their books”

As Richard explains, SWIFT network is simply a messaging system. And in the case the payment gets stuck somewhere, it needs to be tracked down. To track the payment your bank needs to send follow-ups to find out what happened to the initial message. And the only way to get them to do this?

Get on the phone to your bank and ask for the Wire Transfer Department. And solving these issues can take up to several weeks. That can severely hurt businesses. During this time products are delayed and the funds are locked up in the system. This can be a killer for an importer’s cash flow and lead to some really angry customers. Luckily, with Remitsy these sending money to China headaches  are over.

The full article is available here.




Oliver LompartOliver Lompart

Payment in Progress – The Future of Online Payments

Payments in progress, China fintech, payments in China, WeChat Pay, Alipay etc.

Third-party online and mobile payments in China are set to grow over 30% in 2016 and reach 5.3 trillion RMB by 2017. China is already leading the world in fintech – particularly in the mobile payment and P2P lending sectors.

We like to think we’re a key part of the China’s fintech story, so together with fellow startups Clearcut and Megi we decided to host the event “Payment in Progress” at our home base Tech Temple. Speaking to a packed standing-room-only audience, we discussed how payments have changed throughout history, and the world along with them. We covered everything from Western Union, to Alipay, to the blockchain.

payments to China, Richard Bensberg, Remitsy, TechTemple

Richard Bensberg, CEO of Remitsy, talking at Payment in Progress event at TechTemple in Beijing

Payments – An Industry That Affects Us All

The first speaker of the night was our CEO, Richard Bensberg. Richard gave a very brief crash-course on the history of payments and the lessons we can learn from it. He then went on to show how fintech startups are taking bites out of traditional banking services, focusing on areas where bitcoin and blockchain technology can be a game-changer. Finally, we looked at a Remitsy customer case study, demonstrating how the traditional payment channels to China are completely failing businesses, and contrasting to how easy payments are via Remitsy.

Sending money to China with PayPal is expensive. Our client Robert paid £42.01 on £500 payment to China. That is 8.4% of the send amount.

Payments in Progress

Next speakers were Bob Bogaert and Jonathan Ennslen from the startup ClearCut, which is focused on events management – everything from creating an event listing through to providing payment methods tailored for China. From their point of view, changes in social messaging (think WeChat!) have been a key drive in the mobile payment revolution. In China, the average time spent on mobile per day is 200 minutes and about half of this time is spent on messaging apps provided by Tencent (35% WeChat, 10% QQ).

Speaking of progress, Bob thinks that we don’t realise the progress because it’s incremental. It is like accelerating on a bullet train, with a constant force propelling you. You can feel a little push in your back, but nothing shocking. And then before you know it, you’ve hit 300km per hour.

Likewise, in China, the total value of online transactions are estimated to reach more than one and a half trillion USD by the end of the year. And this number should double in the next 5 years.

Alipay, WeChat pay, China fintech, payments in China

Value of online payments in China is about USD$1.5 trillion with Alipay leading

Accounting for Small Businesses Operating in China

The last speaker of the night was Michael Chiao from accounting startup Megi. There are countless issues that SMEs in China are facing in accounting: dealing with the complications of China’s business compliance; accounting structure and internal controlling processes; staff payroll and welfare. These are all time-consuming activities that take time from what matters the most: growing the business. Megi’s software aims to automate these issues by connecting small businesses with a “virtual CFO” who examines financial records offsite and thus reduces the business’s accounting costs.

We would like to express thanks to the co-organizers of the event AustCham, BenCham and BritCham (CBBC).




Oliver LompartOliver Lompart

Launching Internet-First in China

The Chinese market is arguably second-to-none in revenue potential, but getting started here can be pretty daunting to a small business from Europe. However, many of our customers are the brave companies expanding their business to China for the first time, and we often get asked questions about how best to get started.

Our brains are filled mostly with payments and blockchains (and coffee!), so we thought we better ask our friends at LNP China to come talk on the topic. LNP have been helping some of our customers hit the ground running in China, and Alex Philips, Sales & Marketing Director of LNP China had some great insight into what makes a successful launch in China.

Alex from LNP China is helping foreign business start in China. China, business, SMB, SME, UK

Alex from LNP China is helping foreign businesses succeed in China

To get started, what kind of companies LNP is helping launch here in China, and how are you doing it?

We make it easy and safe for companies from overseas to launch in China. We have expertise in three categories: accounting & finance, human resources, and importing products into China.

At LNP we mainly help companies that have an opportunity in China that haven’t set up an entity yet. We act as an agent who can process goods imports, process payments from local clients, and employ staff on their behalf. This way they can have an asset-lite structure to support their business in the early days and test the market.

In 2000, the middle class consisted of just a few percent in China, now the middle class makes up over two-thirds of the urban population! This explains the drive behind many of the foreign companies we help support.  We serve a wide mix of clients, for example, recently we have an aromatherapy oil manufacturer, a video production agency, and even a photo booth company – they’d found a niche supplying hi-tech photo booths to theme parks!

They sound … very niche!

[laughing] Yes! We also have a carwash company looking into doing business in China. Obviously there is a huge demand for these kinds of high-end products and services in China. And there’s this certain brand of premium car wash that is well-known in the UK that is getting popular here. We are even getting involved in helping set up a blueberry farm for a major fruit supplier from the UK. So again it’s super niche. We see a strong demand for premium products from the UK that appeal to the growing middle class who want a better quality of life. It works.

We are living In the internet age and a lot of businesses are now looking at cross-border models of doing business. I think many small businesses think that if they want to do business in China or elsewhere, and that maybe they don’t need all the licences, follow product regulations, and stuff like that. So now you sell online, do marketing online, speak to your customers online – do you need to pay attention to these things? What do you have to consider when selling into China from abroad?

It’s a good question! On the B2C level, the internet has certainly changed how companies can do business with China – particularly selling to China. And the government here has got a good grasp on it. The past few years have seen different government departments get together to ease regulations and allow companies from overseas to sell their products directly using cross-border e-commerce platforms.

“On the B2C level it’s great – you no longer need a company in China to sell your product to the Chinese consumer.”

The major players are JD.com and Tmall. A brand from the UK can sell their product direct to a Chinese consumer on these platforms, without needing a company or agent in China acting as an importer of record. On the B2C level it’s great – you no longer need a company in China to sell your product to the Chinese consumer.

However, B2B is lagging behind a bit. If you are selling wholesale to China you still really need an entity on the ground here, be it either your own company, a subsidiary of that company, a distributor, or an agent – someone to act handle that physical import record.

Can you expand on what needs to be considered when selling in China without a registered entity?

If you are selling B2B and are just receiving payments directly to your company back home, then you only need to consider the tax implications in your home jurisdiction.

Prior to the changes in cross-border e-commerce in 2016, regulations about what products can be imported to China via cross-border e-commerce were quite lax. You could bring products in across many categories without even a Chinese label on them. However, that changed earlier this year and the authorities are starting to get stricter.

LNP China can help you with setting up a company in China. They help companies with entry to Chinese market and with crossborder business. Setting up cross-border e-commerce in China is easy, successful launch in China

Alex Philips from LNP China is leading the meeting at the client’s office.

One of the reasons behind this is that they began to find consignments of fake products being imported to China via cross-border e-commerce. Categories such as baby milk formula – which is of course, a hugely popular product – have a particularly strict set of requirements now. Cross-border providers of products like this now need to be registered with relevant authorities, you need Chinese-language labelling, and the product needs to comply with the Chinese ingredients specifications.

For many producers of infant milk formula, that has changed the game and they need to figure out how they will comply with the new regulations. Also, previously goods sold on cross-border e-commerce were levied with varying rates of parcel tax but this has now been replaced with standard VAT, but a 30% tax discount can be applied on goods sold via cross-border e-commerce. However, the big difference is that there is still zero import tax on goods sold via this channel.

What online tools, tech, or services can businesses take advantage of as they expand their remote presence in China?

JD and Tmall are the two major players in the cross-border e-commerce space, but there are other more nimble solutions that SMEs could use to take advantage of the market. WeChat is one of them. Setting up a WeChat store is now relatively straightforward for a foreign company, to enable them to sell directly to Chinese consumers. WeChat now even offers a cross-border payments solution within WeChat that allows overseas companies to accept payment for goods.

“Setting up a WeChat store is now relatively straightforward for a foreign company, to enable them to sell directly to Chinese consumers.”

Technically, this is only possible under a ‘Personal Effects’ (rahter than cross-border e-commerce) there are some tight restrictions in terms of what you can import into China through that channel. The value of goods is limited to 1000RMB per package. For many luxury brands that’s very limiting as their products are usually more expensive than that.

Goods sold through this kind of channel don’t necessarily classify as cross-border e-commerce, unless it’s connected to one of the major cross-border e-commerce channels previously mentioned hence the low limit. Instead, they classify under personal effects. However, many people do it in different ways and some people don’t bring products through the official channels to avoid this limit. But for companies that are selling low- to mid-value products, WeChat is definitely a good channel. It’s an especially good channel to test the market.

“For companies that are selling low- to mid-value products, WeChat is definitely a good channel.”

The other option is selling from your own website. Many brands we have come across are being drawn to China because of the traffic from Chinese users on their global websites. In order to scale that up, you want the website to be functional and have fast load times in China. The only way to do that is host your website in China. But to do that you need to get an ICP license, which requires your company to be registered in China. There are many service providers that can lend their own ICP licenses for a short period of time to enable you to test the market.

Setting Up Store on JD or Tmall Is Not Enough

When running their store remotely, how do small companies spread the word about their stores and products? It’s all well and good having a channel in China, but how are they generating their sales?

We have come across a lot of companies who have set up a store on JD or Tmall but struggle to drive traffic to it, because it is a very crowded marketplace and it works very differently to Amazon, for example. On Amazon the promotion platform is more transparent, and it’s more advanced in terms of how it drives traffic to your store.

“Many British brands get frustrated with that and maybe don’t achieve the success that they hoped for.”

Many British brands get frustrated with that and maybe don’t achieve the success that they hoped for. Just having a presence on JD or Tmall is not enough. There are now many specialists in China and focused marketing agencies out there that can help you develop a following on WeChat or increase your rankings on these platforms and on search engines like Baidu, to drive traffic to your store. I think you really need that specialist’s insight in order to give you a chance for success.

With their product on the market in China, most businesses are going to need Chinese-speaking customer support, marketing, business development, and generally some hands-on support in country, what’s the best way to go about hiring before registration?

There are a number of options. You certainly don’t want to be handling these kinds of tasks without a native speaker. Many of our clients choose to hire recent grads or study-abroad students and have them work from their offices in the UK. Another option is to hire a professional agency for each of the tasks, but this can be expensive.

“Many of our clients choose to hire recent grads or study-abroad students and have them work from their offices in the UK”

Finally, you can engage with freelancers to work remotely in China. This, of course, opens up all sorts of trust issues, especially with the cultural and language differences. But managed well, it can be a great option to have feet on the ground to help you grow faster on a budget. As you know, many of our clients are going this route and are making payments through you guys!

Expect Surprises When Launching in China

How easy (or difficult!) is it nowadays for a European e-commerce company to expand their offering to China?

In terms of regulations, it is easier. There’s less paperwork & applications you need to submit to get going. However, it is not that cheap to set up a store on JD.com or Tmall Global. There is a significant bond required to register a store, plus a significant annual fees, plus all the promotion and SEO costs to get your products actually seen. This is a big barrier to many small companies that might not be able to put so much money up front.

I recently heard a story of a pretty famous UK brand who had to fold out from all of these platforms, because after a year they just couldn’t recover the costs of remaining on the platform. And this is a well-known brand, which is popular among Chinese shoppers in London – they just couldn’t get a return on the investment in the first year. Companies still need to weigh up various options before diving headfirst into cross-border e-commerce.

How long does it typically take for a company to go through this whole process to set up a store on JD.com or Tmall and start selling?

It varies from case to case. If you’ve got everything lined up, you can do it in a matter of a month or two. Maybe even in less time. But in reality, it is not just setting up the store, but about the design of the store and work with an agency to figure out how to drive traffic, creating campaigns on WeChat or Weibo, that kind of thing. It’s all about an integrated approach and therefore it is more like six to twelve months investment with a lot of focus on driving the business from overseas with a help of local expertise. It is definitely an exciting route, but it requires a lot of focus, dedication and investment in terms of time and money.

For business selling to China, what can they do to optimise their supply chain?

In terms of businesses selling to China via e-commerce, the one big advantage is that you can use the bonded warehouses within the free trade zones to hold your goods – for example in Shanghai or Tianjin. When it comes to customs and clearance, the free trade zone basically moves the borders to the edge of the free trade zone. You can bring your products in, and once the order comes in they can then be released to go through all the customs and clearance. And they are closer to the end user so they can be delivered in the shorter period of time – in terms of days, rather than the consumer waiting for weeks.

And how do you take advantage of these bonded warehouses? Does JD or Tmall offer this?

You can join on one of these platforms and they have a whole list of recommended suppliers to work through that offer bonded warehouses.

Mistakes to Avoid For Successful Launch in China

What are the most common mistakes you’ve seen from cross-border e-commerce companies launching in China, entering the Chinese market?

Underestimating the cost and difficulty. For example, we were working with a manufacturer of infant milk formula from Europe recently and they had a whole business plan selling the products via WeChat and the major cross-border platforms, but then a container of counterfeit infant formula got caught in customs and all these regulations started to come in, making it all more difficult.

They had to completely rethink their strategy and now they are instead looking at setting up a company here in China and bringing it here through the traditional trade route or through distributors. So you need to be on your toes when you are doing business in China and be patient as it can take a lot of time to be successful.

Any more juicy mistakes that you have come across?

[laughing] There are so many. One that happened recently. A British company came to us and they had a Chinese name for their product. Unfortunately, the two words they picked meant “lose a lot of money” in Chinese. It was a phonetic translation of the brand name. Then another company had a problem registering their company as the Chinese name they chose sounded too similar to the translation for “Gareth Bale”.

Anything other advice you would like to leave businesses getting launched in China?

Don’t underestimate the Chinese market. It has a lot of potential, but in most cases, you need to dedicate a serious amount of time and resources to making a strategy here work. There are two key bodies of knowledge. The first is around strategy: selling your product, localisation, marketing, and the sales process. The second is more technical: regulation for certain product categories, limits to WeChat sales channel, things like that. What we see time and again are companies trying to figure this all out for themselves, getting distracted from what they’re good at – their core business. Our opinion is that operational support is key. You need partners with local expertise to allow you to focus on your business.

USD RMB sending money to China can be easy, setting up cross-border e-commerce in China, successful launch in China

Getting money to or from China in cash is not the smartest idea

To wrap up, you got any crazy stories about payments in China?

[laughing] Lots of crazy payments stories. There was an Australian company selling a patent for medical device to a Beijing company. The negotiation took two years and finally they signed the agreement and agreed on monthly payments. A few months went by and Australian company still didn’t get paid anything. The company’s representatives finally flew over to China to examine what was going on.

They had this crunch meeting in the board room and suddenly this sports bag with 250k Australian dollars in cash was lifted onto the table! The representatives obviously refused to accept the cash, explaining that there wasn’t even any way to get this amount of money onto a plane, so the Chinese company had to figure out another way.

“They had this crunch meeting in the board room and suddenly this sports bag with 250k Australian dollars in cash was lifted onto the table!”

In the end one of the Chinese company’s board members had a brother-in-law studying in Australia, so they found some way to pay the Australian company through him. The driver behind all of this – why they didn’t just pay directly through a bank – was simply tax evasion. Royalty payments for patents have a 10% withholding tax, so they were keen to avoid this. It’s important to be aware there are all sorts of different dynamics happening in the background in China when doing business here.




Oliver LompartOliver Lompart

Payments On the Go – Remitsy in Shanghai

Shanghai, China fintech, payments, Remitsy, startup payments to China

Remitsy blockchain-powered payments travelling to Shanghai

Here at Remitsy, we’ve always believed in payments on the move. This has never been more true than the last two weeks when Remitsy have participated in SILK Ventures intensive acceleration program in China. Together with a select group of innovative startups from UK, we had a chance to go to Shanghai to present Remitsy to a wide range of enthusiastic payments experts, investors and fellow innovators. Here are some of the highlights! Enjoy 🙂

Massive Mobile World Congress in China

Remitsy, Richard Bensberg, paying subcontractors in China, SME, booth at MWCS

Richard Bensberg, CEO of Remitsy, talks to a visitor at MWCS 2016

First event was Mobile World Congress Shanghai (MWCS). MWCS is one of the largest mobile industry events in the world and largest in the Asia. More than 53,000 participants attended this year. We were there presenting our blockchain powered payments to China in the “4 Years From Now” (4YFN) startup hall.

Why Are Payments to China So Hard?

Before we went down to Shanghai to present Remitsy we were asking ourselves how we could get people’s attention at this massive mobile congress with over 1,000 other exhibitors. Without a physical product, let’s be honest – payments can’t compete for your attention with the latest drones or VR equipment.

business payments to China, Remitsy, sending money to China, hidden fees, startup payments to China

Businesses are losing millions on payments to China. Don’t be part of this statistics!

Instead of putting our heads in the sand, we developed a simple application showing how much businesses around the world are losing on their transactions to China in real time. That got people stopping by to ask questions. And we were more than happy to explain how Remitsy can help over a cup of fresh coffee that is becoming a Remitsy trademark.

Mobile World Congress Without Mobile Payments

This year’s MWCS theme was “Mobile is Me”, but the event wasn’t as mobile friendly as we wished for. Spoiled by our daily mobile experiences in China I tend not to bother carrying my wallet anymore – just keys, metro card and phone. With Alipay and WeChat Pay accepted everywhere I don’t need to carry anything else. Mobile payments are seamless and cash has retired in China! But, well… has it? Shops and restaurants at MWCS, the world’s showcase of the best in the mobile, caught us out when we were told that mobile payments were not supported!

Startups Looking for Payments to China

After MWCS was over we had a short stop at ChinaAccelerator, an incubator helping foreign companies to succeed in China. Having presented our payment solutions to some creative startups and investors, we found our Mass Payout feature in high demand! It’s great to know that startups are among the customers that we can help the most. Startups expect their solution providers to use cutting-edge technology, but also demand cost savings from all their suppliers – needless to say, Remitsy couldn’t have suited them better.

Richard Besnberg, Remitsy, business payments to China, innoX, startup, fintech

Richard Bensberg, CEO of Remitsy, presents business payments to China at innoX in Shanghai (Picture from China Daily article)

Next day we travelled a bit further to Jiading New City in Shanghai where InnoSpring prepared a “Special show for innovative British startups”. This event was part of the fifth innoX Innovation Star Show. innoX aims to select innovative high-tech projects on a global scale and encourage innovation. With a different audience demographic, our CEO Richard Bensberg launched into his best Beijing accent to demonstrate that the whole Remitsy team are cross-border in all senses of the word – not just payments!

Remitsy Back to Beijing

The program then followed with more events and meetings in other cities. We joined SILK Ventures and rest of the guys at our home base in Beijing. We would like to express sincere thanks to SILK Ventures for the opportunity to be part of the acceleration program and having a chance to meet and talk to interesting people from inspiring companies.

Other startups that have participated in this program:

  • Gamewheel – creating gamified ads for now and for not-so-far virtual reality future
  • Revolut – fintech startup making consumer multi-currency payments seamless
  • Silicon Markets – trading platform with machine learning and other cool features
  • TeachPitch – helping teachers to discover the best lesson resources online
  • Viva City –  helping Chinese travellers overcome difficulties during their travels, with a special focus on food




Oliver LompartOliver Lompart

Breaking the US Dollar Addiction

This article first appeared in June’s issue of FOCUS Magazine, the official publication of the China-Britain Business Council and British Chamber of Commerce in China. Learn how you can read the current issue here

Many British companies pay their Chinese business partners in US dollars, despite the fact they operate in British pounds. But for businesses based outside the US, relying on dollars can lead to hidden fees and unseen risks that can hurt your bottom line.

US dollar alternatives, USD, GBP, RMB, sending money to China, paying supplier in China

Don’t be limited by US Dollar. There are now other alternatives for payments to China (Picture: FOCUS Magazine)

Why Do We Use Dollars?

For developed economies, it’s more convenient. Businesses purchasing goods or services know their supplier abroad will accept dollars, and suppliers quote invoices in dollars because they know their partners can pay in them. But UK companies getting paid in pounds, and Chinese companies buying raw materials in RMB are both paying currency conversion fees for these same dollars.

The Hidden Cost of Conversion

Savvy travellers steer clear of airport currency conversions, but few businesses question banks when making overseas transactions. Businesses need to be diligent in performing their own conversion calculations and ensuring they understand the mid-market rate. This is the mid-point between the buy and sell price in the currency markets, increasingly known as the real exchange rate. Deviance from this rate means that money is being lost in the transaction. In the UK, converting from pounds to dollars means losing between one to four percent depending on the amount. Smaller payments lead to greater fees, which means small and medium-sized businesses pay the most. And while companies usually account for every expense, few record their exchange rate loss or their payment processing costs. Things are even more confusing on the supplier side, where the dollars received must be converted to RMB. Luckily, converting foreign currencies within China is a far cheaper transaction, with currency conversion losses ranging between 0.5 to one percent.

Putting a Price On Currency Risk

Owing to varying exchange rates, suppliers need to protect themselves from USD-CNY currency fluctuations. The time between issuing their invoices and receiving payment can take two to three months – and anything can happen. In August 2015, the RMB was devalued by over three percent in just two days. Buyers in the UK should also worry about currency risk. If British companies do not maintain US dollar accounts (at the expense of cash flow), a depreciating pound versus the dollar would mean more expensive goods or services when it comes to the settlement date. Europe’s more mature financial markets allow companies to hedge products to fix an exchange rate for a set time in the future. But Chinese suppliers are often forced to take a cruder approach; they increase the invoice’s value to include a ‘buffer’ against any potential currency fluctuation. In general, this currency risk hedge used by suppliers is around 5 percent. If the RMB devalues against the dollar, then the supplier wins twice – but is unlikely to pass the savings on to you.

Costing It Up

Taking all this into account, value leaks from every transaction. Small business might lose up to 10 percent per invoice, just for paying with dollars. The wrong approach is to see part of these losses as ‘not our costs’. The invoice price versus production cost is all that matters. By reducing your suppliers’ costs you should also decrease the costs of the goods or services being purchased.

Obstacles to Change: Tax Avoidance and Inertia

One factor behind Chinese suppliers’ preference for US dollar settlements is tax benefits. Exporters in China may set up offshore bank accounts in jurisdictions such as Hong Kong, Singapore and Taiwan. After receiving payments to these locations, the Mainland company re-invoices the offshore company at a lower price, leaving the majority of profits in offshore accounts – which, owing to looser financial regulations, are more liquid and flexible. Furthermore, the exporter only pays taxes on the small margin between their expenses and the new invoice. Despite the conversion costs, tax savings are a big incentive for suppliers to avoid seeking any other solution. Unfortunately, this can sometimes scupper attempts to improve the payment process.

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Breaking the US Dollar addiction in trade with China

Times are changing, however

China’s stellar economic growth is slowing, and regulators are realising that well-earned export profits are languishing outside the country’s coffers. On-shore settlement will soon be the only available option for payments to China, and suppliers will be looking to optimise margins. The other big obstacle to change is familiarity. Processes have been established around using US dollars in trade, and asking either company to upend years of tradition can be challenging.

What Are The US Dollar Alternatives?

As a British company making purchases from China, the obvious alternatives are RMB or pound settlements. Either option means that payments are only subject to one conversion loss, and one dimension of currency risk.

The Rise of the Redback

Increasingly, companies are turning to RMB settlement. By paying in RMB, the supplier no longer has to worry about currency fluctuations, and discounts should be more easily negotiated. According to a 2014 HSBC survey, 55 percent of Chinese suppliers are willing to give discounts of up to five percent if the buyer can settle in RMB. A prime example is British supermarket chain Tesco. Realising the possible savings gained through clever currency management, the company has insisted that all Chinese suppliers accept RMB settlement. By controlling the payment process, Tesco has minimised the value leakage during transactions.

Pounds Are Good Too

While Chinese suppliers should technically prefer RMB settlement, it’s not always an option – and in this case, UK businesses should push for invoices in pounds. This still pins the currency risk on the supplier, who will implement the usual price buffering. However, at least the payment undergoes only one conversion, which ideally should be performed within Mainland China where exchange rates are better.

Weighing Up Your Options

The US dollar is still, without a doubt, the world’s dominant currency, but thanks to a fast-evolving cross-border payment space, it is no longer the only option. Investigating new payment solutions takes time, but long-term rewards will more than cover the investment in research. It is no longer acceptable to ignore the costs of dollar overuse. By taking responsibility for the total cost of cross-border payments, businesses can improve their bottom line.




Neil WoodfineNeil Woodfine

Blockchain Powered Payments to China

Recently we had a couple of interviews with Juliette Boulay from Daxue Consulting (link) and the guys from LNP China (link) when we chatted about how Remitsy was started and how we work. We thought it’d be a good idea to share some of the highlights on our blog!

Why Remitsy payments are powered by the blockchain

Everywhere we go, people are asking us about blockchain and what it is. You have surely heard about blockchain as well, but might wonder how it really works and how it helps Remitsy to transfer your money to China. We are lucky to have Richard and Neil on the team, as they are some of the few blockchain experts in China.

A blockchain system can give businesses a lot more confidence when making transactions. The blockchain is essentially a ledger – which is distributed across all users of the system. If someone makes a transaction, everyone’s version of the ledger is updated. And each user is automatically checking all others to make sure a mistake hasn’t been made. Every transaction is time stamped so nothing can be changed subsequently. This results in a very transparent and secure payment system, that no longer requires a centralized third-party to verify each transaction.

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Your Remitsy payments to China are also powered by the blockchain!

What we do is take advantage of blockchain technology’s ability to digitize value across a decentralized network, and thus make funds accessible almost instantaneously anywhere around the world. In other words, this allows us to convert from one currency into another via a record on the blockchain – for example making GBP in the UK available to us as CNY in China within seconds. This method is so efficient that it allows us to convert currencies at the real exchange rate (the mid-market rate used across the financial sector).

Bank fees and costs of other payments solutions

When we started Remitsy, our original aim was only to disrupt the traditional banking sector’s dominance in the business payment market. But we quickly realized that a lot of small business were using PayPal and other online platforms to complete their international payments. Even though the processing fees, exchange rate spread, and withdrawal fees adding up to 9% of the total invoice value! And we thought banks were charging a lot! The fact that businesses are forced to choose these payment options is evidence of the huge inefficiencies of modern international payments, and we want to solve it.

As Richard says:

The most important thing is that companies have got to understand their costs. Companies will just accept charges that are given to them by their banks, but if you look at exactly what you are being charged, you will realize you can usually save a fair amount. Also, foreign companies don’t realize that when Chinese companies receive foreign currency they will be hedging their currency risk. Usually, they will add 5% to the price of their invoices in order to cover potential exchange rate fluctuations.




Oliver LompartOliver Lompart

We’ve finally put together our video from the Cross Border Summit in Shenzhen (thanks for waiting!). Our colleague Neil, Larry Salibra (CEO @ Pay4Bugs) and Mike Michelini (CEO @ Global From Asia) discuss how the fintech revolution can improve your bottom line.

In this video you will learn about:

  • Key terms in cross-border payments – what do you need to know to sound like a pro?
  • Leveraging the pros and cons of a multiple-currency business
  • Walls online – banking regulations explained
  • Payment compliance and why your payments might have been red-flagged
  • ACH (Automated Clearing House) – what is it and who uses it?
  • SWIFT – overview and why we should care (including Mike’s own bad experiences with SWIFT!)
  • Bitcoin – what is it? Isn’t that the “funny money”? How can businesses use it?
  • Bitcoin in China & Hong Kong – what are the latest solutions?
  • PayPal in Hong Kong – dealing with currencies and verification.
  • Blockchain – debunking the hype. What is it? What are the latest news? With bitcoin or without? How the fintech revolution can save you money?
  • Using fintech in your business – this all sounds great, but how to apply it?
  • What options are there for sending money to China?

Cross Border Payments and Banking Panel Discussion

For your convenience, we have uploaded Cross Border Payments and Banking Panel Discussion also on Youku.



How the Fintech Revolution Can Save You Money

We’ve finally put together our video from the Cross Border Summit in Shenzhen (thanks for waiting!). Our colleague Neil, Larry Salibra (CEO @ Pay4Bugs) and Mike Michelini (CEO @ Global From Asia) discuss how the fintech revolution can improve your bottom line. In this video you will learn about: Key terms in cross-border payments [...]

Oliver LompartOliver Lompart

Remitsy at the Cross Border Summit in Shenzhen

Recently the Remitsy team headed down to China’s cross-border business nexus, Shenzhen, to attend Global from Asia’s Cross Border Summit.

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Remitsy are payments on caffeine, so we couldn’t miss a chance to take care of the coffee at Cross Border Summit

It was awesome to get the chance to speak to up-and-coming cross-border business owners from around the world. We learned a lot about the current trends in international e-commerce (which is clearly booming right now!) and the challenges faced in selling to customers across the globe.

Cross-Border Payments & Banking

Neil Woodfine (Remitsy’s COO) joined Larry Salibra and Mike Michelini in a panel discussing the complexities of cross-border payments and how the latest fintech solutions can be used to save businesses time & money. A major takeaway from the chat was that it only takes a bit of research and a few small changes to your payment process to make a business seriously more competitive.

We shot a video of the talk and will release a video of the event on Youtube soon. So watch this space!

Find Remitsy in this short video from Cross Border Summit in Shenzhen brought by HK News:




Oliver LompartOliver Lompart

Take Control of Your Payments

It’s better to see something once than to read about it a thousand times.

Therefore we have created a handy visualization on payments to China. We hope this will help put things into perspective – on the one hand classic payments via banks, on the other payments through Remitsy.

The standard method of sending money via banks is over-complicated. An explanation of the payment process flow through the traditional banking system can put even the most ardent insomniac to sleep (or just give them a headache!).

Business owners often don’t know how much they are actually paying for their international payments. But in our opinion it’s not at all their fault – banks and other third party services make it as difficult as possible to figure it out.

We hope this short presentation makes payments to China easier to understand, without the headache!

Enjoy!




Oliver LompartOliver Lompart