Payment and e-commerce are interdependent. Chinese e-commerce has been running for nearly 20 years, and the business format has gradually matured. As an infrastructure mobile payment, it has also penetrated into all aspects of national life.
The same development path can be migrated to the cross-border payment market. State-led and non-governmental spontaneous cooperation projects have sprung up, and business exchanges and personnel exchanges between China and other countries have become increasingly frequent, which has led to economic cooperation between relevant countries and the rapid development of cross-border commerce.
Payment link becomes a major bottleneck restricting cross-border business
Payment is the basic service of the business system. Traditional cross-border payment has two main forms: one is the international settlement business between banks, that is, remittance through traditional international settlement tools such as wire transfer, letter transfer, and ticket exchange; the other It is a small remittance business represented by Western Union. The former is mainly aimed at the general trading business between companies, while the latter is mostly based on individual customers.
The traditional payment methods cope with the insufficiency of market changes, and the advantages of online payment giants are difficult to play, giving other third-party payment companies the opportunity to show their strengths. They really do not have any advantages compared with giants in the 2C market, but they are on the same starting line in the 2B business. Due to scale costs and organizational reasons, other third-party payment companies may be more flexible and cost-effective than giants. Therefore, some powerful manufacturers rely on the advantages of their own technology and services, by providing industry solutions or customized services, to focus on the more profitable 2B business, trying to obtain the most valuable part of the cross-border payment market.
Cross-border payment becomes a new battlefield for third-party payment companies
With the rapid growth of cross-border transaction funds, many parties are optimistic about the third-party cross-border payment market, and competition is becoming increasingly fierce. Up to now, 35 domestic cross-border payment licenses have been issued, including 30 cross-border foreign exchange payment licenses and 5 cross-border RMB payment licenses. The B2B market is showing rapid growth. According to Accenture data, by 2020, China's cross-border B2B transaction volume will reach more than one trillion US dollars. This also shows from the side that the current overall competitive environment for cross-border payments is superior to the domestic online payment market.
How does imported cross-border e-commerce play cross-border payment
- Cross-border payment under the bonded zone model Logistics and payment are like the right arm of e-commerce development. If a foreign company develops a cross-border e-commerce business in China, and already has a registered company in mainland China, it means that the foreign company has a Chinese domain name, ICP filing, and servers are also deployed in China. In this case, after the Chinese consumer places an order, the company can use the bonded area or direct mail mode to deliver the goods. Correspondingly, the technical solutions of cross-border payment can be converted into docking with electronic payment methods commonly used by Chinese consumers such as Alipay and WeChat payment.
- Cross-border payment under the overseas direct mail model In the overseas direct mail model, Chinese consumers first place orders, foreign goods arrive at the Chinese customs warehouse, and after domestic customs clearance, domestic logistics and delivery. Compared with the bonded area model, overseas direct mail is imported in the form of individual parcels. When taxed, it is necessary to pay 5% -10% tax, which can ensure the richness of the product category, but it involves overseas warehousing, receipt packaging, and transnational transportation , Customs clearance, domestic distribution and other links, without strong control, it is difficult to have advantages in time and freight. TMO Group (Exploration Network Technology) has fully developed payment integration in the construction of e-commerce websites for cross-border companies, supports multiple interfaces such as Alipay, WeChat payment and UnionPay payment, and also provides ID verification functions for docking with customs , Logistics information tracking and other technical solutions to meet the needs of cross-border e-commerce.
- Overseas e-commerce payment solution If a foreign company develops a cross-border e-commerce business in China, there is no company registered in mainland China, its website does not have a Chinese domain name and IOP filing, and the server is hosted overseas, then the e-commerce in this case How does the business complete cross-border payments? In terms of logistics, such companies often use the postal method to send the goods, and the payment information does not need to be confirmed by the Chinese customs when the consumer orders. One solution is for an overseas company to find an intermediary agent with an entity in China to collect payments in the name of the agency company, and the intermediary agent charges a certain percentage of service fees. Since the server of the overseas e-commerce company is not in China, it carries certain risks for the agency company. Another solution is to use Alipay International Edition or WeChat Pay Overseas Edition. Overseas companies need to pay a handling fee of 2% to 3.9% for withdrawals, and often implement delayed arrivals. Exchange rate changes will also affect earnings.
Fourth, the import cross-border trade payment solution is different from the above three situations, and some companies may have registered entities in China, but for various reasons, instead of using the bonded mode or overseas direct mail, the postal method is also used. In our general import trade, the choice of payment method can be paid within China. The disadvantage may be that the tax rate is relatively high, but compared to the cost of applying for a certificate in two years, the fast shipping method is to use postal customs clearance, deliver the tax rate, and then use domestic payment methods.
Cross-border payments involve a wide range of stakeholders, and transactions are more likely to happen to foreign or foreign entity companies, especially in areas such as the Middle East, Southeast Asia, and Africa, where the technical means, regulatory regulations, and business models are far from China, the United States, etc. The country is quite mature, so it is relatively difficult to manage the authenticity of users in cross-border payment transactions and to prevent and control criminal activities such as conspiracy to evade foreign exchange, fraudulent bill fraud, and money laundering.
In addition, many third-party payments are still in a savage state of unlicensed operation, which is very easy to form the phenomenon of bad money being expelled from good money in the cross-border payment industry.
Because of this, strengthening the license and identity management of cross-border payment companies has become the mainstream policy guidance of governments. It is expected that China will seize the opportunity, follow the trend, act actively, and be invincible in the competition of cross-border payment.
