XTransfer, a leading Fintech company in B2B foreign trade financial services, has officially announced its plan to launch financial services targeting local SMEs in Hong Kong in Q2 this year.
Daniel is the head of a toy trading company in Hong Kong that primarily imports various types of toys from mainland China and sells them to Europe, the United States, Australia, Canada and other regions. Daniel has business relationships with hundreds of suppliers from mainland China, most of which are small and medium-sized enterprises (SMEs). One of the major challenges that the company faces in its operations is finding a way to make payments to mainland suppliers that is safe, efficient, convenient, and cost-effective.
“Due to various restrictions, many Chinese suppliers are unable to offer accounts that can receive foreign currencies, which means that I have to find alternative ways to pay them. However, these alternative methods are often unsafe and not compliant with regulations, and I have even encountered issues with fund freezing. In addition to concerns around fund safety, I also face challenges related to timeliness, handling fees, and exchange rates. Some suppliers refuse to start production or shipment until they receive payment, and even when payment is made, it often takes 2-3 days for the funds to arrive. This can be particularly problematic when we have urgent needs to receive the goods.”
What Daniel has encountered appears to be a common issue among trading enterprises in Hong Kong. According to Census and Statistics Department of The Government of the Hong Kong SAR, mainland China is the largest supplier of goods to Hong Kong. In 2022, the volume of trade imports from mainland China accounted for 42% of the total of import trade in Hong Kong. However, there is still significant room for improvement when it comes to cross-border financial services with mainland, particularly for SMEs.
Since 2010, global financial regulations have become increasingly stringent, making it difficult for traditional financial institutions to provide sufficient service and support to mainland SME exporters. This is due to the need to consider compliance and operational costs comprehensively, which has led to increased difficulties and costs for SMEs in their operations. Even if mainland SME exporters are able to successfully open an overseas foreign currency account, Hong Kong importers often face challenges such as long processing times, hefty costs, and compliance reporting requirements when paying mainland suppliers. As a result, importers in Hong Kong and exporters in mainland China both have an urgent need for facilitation of cross-border payments.”
XTransfer, a one-stop cross-border financial and risk management service company for foreign trade enterprises, has been focusing on providing B2B cross-border financial solutions for six consecutive years to address these challenges. XTransfer has accumulated extensive experience and formed competitive advantages in various aspects such as products, risk management and customer services. In October 2017, XTransfer obtained the Money Services Operator (MSO) license in Hong Kong, allowing the company to provide comprehensive solutions including cross-border payments, multi-currency cash management, and risk management services by linking large global financial institutions with foreign trade SMEs. Since its establishment, XTransfer has received multiple rounds of investments from well-known domestic and international institutions such as Yunqi Partners, Gaorong Capital, China Merchants Venture, 01VC, eWTP Fund, Telstra Ventures, MindWorks Capital, D1 Capital Partners, and more. With an estimated value of over $1 billion, XTransfer has achieved unicorn status. Currently, XTransfer has served more than 300,000 SME exporters and is the leading company in the B2B foreign trade finance sector in mainland China.
XTransfer plans to launch localized services including cross-border payments and other related financial services for trade in Hong Kong in Q2 this year. When Hong Kong buyers pay mainland suppliers through XTransfer, it will be as easy as doing “local HK payments”. Moreover, XTransfer supports 24/7 instant payment to other XTransfer accounts and is expected to reduce remittance fees by 95% and exchange cost by 20%, significantly improving the efficiency of operating funds. XTransfer will also provide “sunshine settlement” and compliance reporting services for enterprises in both Hong Kong and mainland China, allowing for direct remittance of RMB to the seller’s bank account in mainland China after reporting exchange settlement to the bank on behalf of the enterprise. In summary, XTransfer is making trade remittances more convenient, safer, and stable for businesses.
Daniel, as one of the first clients of XTransfer in Hong Kong, has tried out its cross-border financial services. “I am currently using XTransfer to make payments to my mainland supplier’s account, and the incoming speed is fast, allowing the supplier to arrange timely delivery. XTransfer helps our suppliers to complete mainland foreign exchange reporting in a more compliant way.”
With the resumption of normal travel between mainland China and Hong Kong this year, trade between the two places has become increasingly close. In the post-epidemic era, XTransfer’s arrival in Hong Kong precisely coincides with a growing demand for facilitated cross-border financial services from trade enterprises in both Hong Kong and mainland China. This move aims to provide Hong Kong enterprises with more accurate and tailored services that respond to their needs and provide a safer way to make payments to mainland China.
SOURCE XTransfer
