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Join us for an insightful discussion on how global payments are evolving and the role Sokin is playing in reshaping the way .
Michael Bergman
Director of Demand Generation
Advantages of paying suppliers directly in CNY
Whether you’re running a brand ready to take on the world or a household name looking to diversify operations, you’ll likely encounter some specific issues when sending payments to China. Let’s zoom in on a few common headaches:Fiddly remittance processes: For many, sending payments to China isn’t a simple case of tapping a few buttons within your existing banking portal. Depending on the solution(s) you use and your preferred end currency, you could be tasked with converting currencies multiple times or switching between various tools and providers to get the job done. Not fun.For example, say you ship goods from China to a European port, with the UK as the end destination. Your shipment would go through three currencies (Renminbi, Euro, and British pounds), which may require different money exchange providers and concurrent wait times.Varied currency exchange rates and expensive processing fees: Fluctuating FX rates and expensive processing fees have become the norm for many businesses sending Renminbi payments to China. And, if you wind up with both problems, an eyewatering bill can soon follow with negative impacts on your business’s bottom line.Slow payouts: Some providers are notorious for payouts so slow they rival snail mail, with typical services taking 2-3 days at a minimum. This problem can cause frustrating cash flow issues that keep you up at night and stifle growth. Look at it another way, the timeframe might not seem like a huge deal, but if you operate in a fast-moving market or need to place an emergency stock order, it’s easy to see how the delay could be costly.
The problem with sending Renminbi payments to China
When trading overseas, the best way to dodge sky-high fees, long processing times, and unnecessary admin is to pay in the local currency. But there’s one issue. While the official currency of China is the Renminbi, it comes in two forms:CNH: A.k.a., Offshore Yuan, is an offshore currency that trades outside of Mainland China. The “H” stands for Hong Kong, as the Chinese government made CNH so this region could trade with Mainland China.CNY: A.k.a., Onshore Yuan or Chinese Yuan (¥), is an onshore currency used only in Mainland China.
