Under Mastercard Cross-Border Services, commercial customers will be able to transfer money to any bank in China, reduce transaction costs, and get real-time exchange rates for the Chinese Yuan, the financial services company said.
“China is a critical market for Mastercard’s customers, so we are delighted that Bank of Shanghai will help us advance the modernization of cross-border payments into China,” said Stephen Grainger, executive vice president of Mastercard’s New Payment Platforms, in a statement. “Our Cross-Border Services will enable our global partners to deliver a more convenient, cost-effective and certain payment experience for people and businesses everywhere.”
Bank of Shanghai is the latest worldwide financial institution to collaborate with Mastercard to offer people and businesses a more predictable way to pay and get paid across borders.
Mastercard Cross-Border Services connect 90 percent of the world’s population with credit cards, bank accounts, digital wallets and cash agents through a single and secure point of access, Mastercard added.
China is now the largest export economy in the world, according to the World Bank. In 2018, China exported $2.49 trillion to destinations including the U.S. ($479 billion), Japan ($147 billion), South Korea ($109 billion) and Vietnam ($84 billion).
“Cross-border financing has always been a core offering of Bank of Shanghai, and the current climate has led to a heightened customer demand for this service,” said Huang Tao, Bank of Shanghai’s vice chairman, in a statement.
Last month, PYMNTS’ Smarter Payments Tracker reported cross-border payments reached $29 trillion last year and are projected to rise to an estimated $39 trillion by 2022.
Still, the World Bank is anticipating a 20 percent drop in remittances this year due to the pandemic, and these so-called seamless remittances will need to make up the difference.
“The drop in remittance has [a] significant impact on world economies, especially for developing markets, which are highly dependent on remittances, as they are often seen as a source of spending power for recipients in [their] home countries,” Yogesh Sangle, global head of consumer business at the FinTech Nium, told PYMNTS. “A decline in spending power often has severe repercussions on [a] country’s economy as [funds] are frequently used to create a fiscal cushion for governments.”