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.
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.