Crossing Payments Borders In China, Made Easier

China has allure for businesses of all stripes. There’s the excitement to be had from hundreds of millions of consumers coming online, proving steadfast in their buying habits, despite the headlines trumpeting slowing growth in the economy. There’s the movement toward relatively cheaper labor and production costs that, for B2B firms, can translate into better margins.

But there’s also a stumbling block. It can be hard to establish a reliable conduit of payments in and out of the country.

To that end, Geoswift, a payments provider that operates between China and other nations around the globe, said late last year that it had launched a corporate payments solution aimed at giving firms — international ones — the ability to collect payments in the country, locally, in yuan.

The company is partnered with Western Union and with UnionPay International, a unit of China UnionPay. The companies signing on to do business in China conduct payments through Western Union Business Solutions and the Geoswift online payments portal. (Among the services offered, beyond purely corporate ones, by the company: direct payments out of China to foreign universities for tuition payments.)

In an interview with PYMNTS, Raymond Qu, chief executive officer of the company, said that, just a few months after the introduction of the cross-border payments service, demand remains strong, particularly among manufacturing outfits that have outposts in, or source from, China. The movement of funds into the country — “especially in a highly regulated environment,” as he described it, with multi-level reports tracked by that nation’s government — represents a payments flow that is “one to many” across a landscape that is, in turn, largely the province of domestic banks.

But, in addition to settling transactions, locally, in yuan, with attention to, for example, invoices, content, bills of shipping, etc. (there’s a heavy amount of regulatory burden and paperwork), Qu told PYMNTS that firms are signing on to Geoswift in part due to stringent oversight of AML parameters, an increasing concern as funds move quickly and digitally. Through Geoswift, explained Qu, “payments are matched, not just reported,” as firms transact both into and out of the country in yuan.

What of doing business in China itself? Qu said that one key advantage Geoswift has is “that we understand the international markets better than the Chinese players, and we understand the Chinese players better than the international markets.”