An aerial drone photo shows a view of the Tangshan Port in north China's Hebei Province, Jan. 13, 2025. (Photo by Liu Mancang/Xinhua)
BEIJING, May 29 (Xinhua) -- China's foreign trade enterprises are exploring new opportunities in the international market, leading to increasingly diversified financial services demands.
To address the challenges of high payment cost, low efficiency and rising compliance pressure, payment enterprises are turning to AI and fintech for breakthroughs. Meanwhile, cross-border payment providers are evolving from single-function settlement services into integrated financial service platforms, leveraging technology and ecosystem-based strategies to support enterprises in going global.
-- Multiple challenges in cross-border payment
Intensified market competition and exchange rate volatility have brought significant challenges to foreign trade companies in three aspects, namely, payment costs, payment efficiency and compliance capability.
Traditional cross-border payment methods typically charge a fixed fee per transaction, regardless of the amount involved, said Yong Chengxiang, president of Dongguan Industry and Trade Development Promotion Association and chairman of Forever Standing, a handicrafts company based in Dongguan, south China's Guangdong Province.
Payment efficiency directly impacts business operations. Traditional payment methods often involve cumbersome application procedures, low processing efficiency and exchange rate volatility, all of which may hinder business activities.
Moreover, foreign traders may encounter security and compliance risks during cross-border transactions. For instance, a cross-border business based in south China's Shenzhen selects payment platforms mainly based on transaction fees and compliance, according to the company's financial director.
-- AI and fintech as catalysts for breakthroughs
Cross-border payment enterprises are harnessing intelligent and automated technologies to lower payment costs while improving both efficiency and compliance capabilities.
For example, a clothing exporter has integrated its order processing system with the Application Programming Interface (API) of World Trade, a fulfillment and transaction guarantee solution offered by World First under Ant International, so as to achieve lower costs but higher efficiency.
Such practice has enabled fully automated order management without the need for human intervention, stated the founder of the company, adding that the workflow efficiency has been improved and the costs has been lowered.
Apart from achieving lower costs and higher efficiency, digital technology is also the key to risk control. According to Shen Enguang, CEO of the cross-border service provider LianLian Global, traditional risk control relies heavily on manual labor, which can be overwhelmed by the massive amount of transaction data. However, AI can detect abnormal transactions in real time through user behavior models, thus reducing operational costs.
-- From "payment channel" to "ecosystem empowerment"
As more Chinese brands go global, enterprise demands for cross-border payment are shifting from basic settlement functions to comprehensive services, leading to fiercer competition in this sector. Frost & Sullivan, a consulting firm, estimated that China's cross-border digital payment will grow at a compound growth rate of 25.2 percent from 2022 to 2027.
Besides efficient payment, foreign traders also need value-added services. Therefore, payment service providers are becoming increasingly embedded in their clients' industry chains.
Integrated financial service platforms are emerging as a new competitive frontier for cross-border payment providers. As the external environment pushes foreign trade toward a brand-oriented transformation, payment enterprises must evolve from being "transaction enablers" to "ecosystem co-builders".
In the future, the cross-border payment industry consolidation will continue. Leading payment providers will keep expanding their market shares and exploring the global market by leveraging their brand reputation, technological strength and abundant resources, resulting in a higher industry concentration, said Wang Pengbo, an analyst at market consultancy Botong Analysys.
(Edited by Yang Linlin with Xinhua Silk Road, linlinyanglyn@163.com)
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