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You Wanted Payments from India to China? …You got it!

Remitsy now supports sending Indian rupees to China

Since starting Remitsy we’ve been focused on supporting clients from North America and Europe, but we’ve always had a large number of enquiries from Indian businesses wanting to make payments to China.

Cheapest way to send money to China from India. Converting Indian rupees to Chinese yuan, transfer money to china bank account

Payments from India to China have just got a whole lot better

Making payments to China from India can be tough, with small businesses usually forced to make payments in US dollars. This means each payment is hit with two exchange fees (INR  USD, USD CNY) and results in a pile of paperwork at both ends.

Well, we are happy to announce that from now on Remitsy allows Indian businesses to settle payments to China in rupees, with their business partners receiving Chinese yuan direct to their bank accounts.

We’re offering the service at our usual world-leading rates: converting INR to CNY at the real exchange rate (mid-market rate), plus a 1% fee. No fixed send or receive fees. And no surprises. There has probably never been a cheaper way of sending money to China from India.

Send money to China from India

Our payment process for Indian customers is slightly different from other send regions. See below for the steps required:

  1. Book your rate at remitsy.com
  2. Provide us with company verification documents (you’ll only need to do this once!)
  3. Wire INR to our local banking partner bank account
  4. Provide us with your wire reference number
  5. Remitsy deliver CNY to your supplier within 24 hours! 

If you’re a business in India and looking to make a payment, [get registered and check out our platform now]. We have 24/7 live (human!) English-language support to answer any questions you might have (I’m there too sometimes).

This is going to be a huge money & time-saver for the Indian small business community (and their Chinese business partners as well!).

Book payment to China on Remitsy

If you’d like to help us spread the word, we run an affiliate program [Remitsy Share]. For any businesses you introduce to us, we will share half of our fees with you. Worth inviting a friend or two!

We’re looking forward to expanding our service in India and expect this to be one of our most popular corridors. See you at Remitsy soon!



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

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.

Breaking the US Dollar Addiction, US Dollar losing its power, US Dollar and RMB, CNYUSD

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

Cross-Border Payments to China (Podcast)

Richard was recently hosted at the Global From Asia podcast, run by Mike Michelini. Global From Asia helps companies with their business in Asia. Their services range from company formation in China and Hong Kong to business insurance and tax advice.

For anyone interested in business with China, The Global From Asia podcast is an invaluable source of knowledge and I’d highly recommend it. It’s full of practical information on various topics with experts in respective industries.

Cross-border Payments to China. Podcast with Mike from Global From Asia.

Listen to the Global From Asia podcast on cross-border payments

In the latest podcast, Richard and Mike discuss cross-border payments for businesses. Richard talks about how he got into the payments business, before going on to discuss with Mike the state of the international payment system. Mike’s not a stranger to payment issues with China and was pleased to be able to dig deeper into the reasons behind why some of his payments were getting bounced or delayed.

We’ve prepared a special offer for listeners of the podcast, so be sure to check it out! You can listen to the full podcast below 👇🏻, or you can pick it up on iTunes for your commute to work. Of course, it’s also available on the official Global From Asia site, where you can also find some extra materials (link).


Cross Border Summit

Continuing our work with Mike, we’ll be speaking at the Cross Border Summit on April 16th in Shenzhen. This event is unmissable for small business owners selling from Asia. You can learn more about the event here. Look forward to seeing you there!




Oliver LompartOliver Lompart

International Business Payments are Expensive and Slow

“Banks have been doing international settlement much the same way since 1971,” says Richard, founder of Remitsy, in an interview for UK Investor Magazine.

Richard is a strong believer in the innovations in consumer payments, which are now more convenient than ever. But when he looks at business payments, he is a bit less positive. According to him, solutions from banks just aren’t up to scratch, where charging between 3 – 8 percent for international business payments is par of the course. In addition being expensive they are slow. It can take up to five working days for payments to arrive…five working days. There are also frequent cases when payments get “lost in the system” and you’re looking at a very complicated process to get it “unlost”.

Richard Bensberg, founder and CEO of Remitsy commenting on international business payments

Richard Bensberg, CEO of Remitsy

It happens because banks are using old technology and run an expensive service:

“Banks have been doing international settlement much the same way since 1971 – and even where they have leveraged new technology to improve their products, as a user it often feels clumsily crowbarred into legacy systems.”

Business Payments are Changing

Recently there’s been a lot of news on banks such as Barclays and Bank of America (and others) experimenting with blockchain technology. But Richard thinks that the real innovation won’t be coming from the traditional banks:

“Whilst it is clear that banks now see the potential of the blockchain, I think we’ll continue to see the most cutting edge implementations coming from leaner fintech companies. That being said, banks are more than the sum of their technology, and Remitsy are not looking to replace the bank. But we have all heard that software is eating the world, and I see payments as the banks’ bread and butter. And we are hungry!”

You can read the whole article from UK Investor Magazine here.




Oliver LompartOliver Lompart

The Truth About International Payments

How much do your international payments cost? You’d be surprised!

According to research from Goldman Sachs, the average cost of an international payment (and profit of banks on it) is 6%. And that’s not the only cost to be considered. Add in the time spent preparing the transaction, time spent waiting for the payment to arrive and the potential risks involved.

Payments are mysterious

International payments are big business for banks and others. Paying suppliers can be troublesome

Paying a supplier, outsourcing services abroad, or expanding to the market in another country? In today’s connected world, these transactions are now done on daily basis. But sending and receiving money internationally can be a huge burden for your company.

The Business of Business Payments

International business payments are different from other transfers of money abroad. Aside from the extra paperwork involved, international business payments have a direct effect on the profits of you and your business partner. And they also impact the rest of the business processes: production cannot start; goods cannot be loaded; services cannot be rendered… until the money arrives.

I’m Only Paying the Processing Fee, Right?

There are three costs for businesses when sending money abroad. Processing fees, hidden exchange fees and time costs.

The processing fee is a visible cost for the company. It is usually a fixed amount per payment, a percentage of the amount transferred, or a combination of both. The fee varies based on where your supplier is located, what currency you choose and how fast you need it.

Let’s look at an example. Barclays’s fees for an international payment start at £25 (outside of SEPA) (2). But then there are also fees on the supplier’s side, which are much less clear and often not specified. For example, in the UK if you were to receive money from abroad in a different currency, Barclays would charge you an additional £6.

International payments. Exchange rate fee

No fees! Zero percent commission! Sounds like you are saving a lot of money, doesn’t it?

Do you also wonder how it is possible that the exchange rate you look up on the internet is never the same as the one offered by your bank? That’s the second way of charging you for the international money transfer.

Why don’t banks use the official, market-determined exchange rate? Because banks are smart. Internally they use it, but for customers, they add a percent here and there. They know that most people are happy to overlook these charges or don’t even know about them. Out of sight, out of mind — banks are taking advantage of our unawareness.

If you want to use real exchange rate, look for the mid-market rate. You can find this through websites such as XE and Oanda. The mid-market rate is the true exchange rate — unlike the adjusted exchange rates quoted by banks and brokers.

Difference between exchange rate used by HSBC and true mid-market rate available at XE.com

Difference between exchange rate used by HSBC and true mid-market rate available at XE.com

Let’s look at HSBC and their exchange rate. Imagine business owner in Hong Kong who needs to pay his business partner in UK 10,000 GBP. On 17th December 2015, he would have to pay 11.6242 HKD for every GBP. It is worth mentioning that this is “better” business exchange rate, which is only available for online transactions with minimum transaction amount of USD 10,000 or its equivalent (source). At the same time, real mid-market exchange rate from XE.com was 11.5919 HKD per GBP. With HSBC exchange rate business owner from Hong Kong would have to pay 116,242 HKD (and other bank fees as well). If HSBC was using real mid-market exchange rate, you would only have to pay 115,919 HKD. This is roughly 250 HKD (20 GBP) difference.

Time is money. The third cost of your international payment is time. Not only your time battling with extensive bank paperwork, but also the transfer time, when the payment is on its way to your business partner. During this time, these funds are frozen, so they can’t be used by you nor the receiver.

Production and shipping may be delayed if funds do not arrive on time (things get even worse if the payment gets lost in the system!). This can lead to upset customers and has serious consequences for either party’s cashflow. Any business owner knows how stressful it can be to wait for money to arrive.

Innovation in International Payments

In the past few decades technology has changed our lives and made many things easier. But international business payments still remain largely untouched by innovation. We are still sending money to our suppliers mostly “the old way”, using the system that was developed in 1971 before the internet. That old way is expensive.

And why would banks want to change? International money transfers are good business for them. The market is valued at more than half a trillion dollars and is expected to grow further. Goldman Sachs estimates that the banking industry’s total revenue from international money transfers is around 30bn USD. This is the value created by businesses like yours, taken by the banks — just for moving your money from A to B.

However, personal international money transfers are seeing more innovation. Companies like Transferwise and Xoom are now common choices and are seeing increasingly fast adoption. Why?

Imagine an individual working abroad, who is sending money every month to his wife and child at home. This person has strong motivation to save on his international payment costs so that his family can buy more things. By using Transferwise instead of a bank, he saves up to 90% on fees. And because they use the mid-market rate he knows exactly how much it cost.

On the other hand, businesses often don’t even think about doing things differently. If you have always sent money abroad in the same way, you may not be aware there are now other, better ways of doing it. Don’t businesses also need to look for savings?

Money Saved is Money Earned

We spend a lot of time trying to increase our revenues and profits. We come up with sophisticated sales strategies, marketing campaigns and company’s processes to achieve it. Each expense is meticulously accounted for. And yet when you ask a business owner or accountant how much their payments are costing, more often than not they don’t know.

How much does it take for a business to add 2–3% to its margins? Maybe just paying more attention and switching your international payment method can add that kind of savings and more.

After all, a penny saved is a penny earned.




Oliver LompartOliver Lompart