To recommend most suitable remittance product for Chinese market

1. -US-China Remittance Corridor
-Best way to receive remittance in China

2. Agenda
RecommendationProduct analysisRegulations

3. Regulations
Transfers over $10,000
from individuals also
need to be reported
under the new
guidelines.
Chinese citizens can
receive/purchase
currency up to $50,000
per year as per law.
There are restrictions
on withdrawing money
abroad
China maintains a
"closed" capital
account, meaning
companies, banks, and
individuals can't move
money in or out of the
country except in
accordance with strict
rules.
China does not levy gift
or inheritance tax on
the money received.
Chinese Banks have to
report transactions
over $ 7000 or RMB
50,000. Identification
of the receiver is
necessary

4. What are the different ways to receive remittance?
Bank Account
Mobile Wallet
Agent
E-Card

5. E CardAgentMobile WalletsBank Account
Transfer
• If the receiver has
account in Chinese
bank then direct
account transfer
possible from US bank
• Both banks should be
SWIFT members
• FX rates of banks are
higher
• Fee varies from $ 20-50
• Wallet companies in
China will be allowing
foreign cards to be
linked to the wallet
• Only Chinese ID
accepted for transfer
(Alipay)
• Alternatively, services
like yayaka.com to top-
up the wallet
• Not a reliable method
• In certain markets
sending & receiving
money allowed. E.g
WeChat in South Africa
• Money in recipient
country will be
delivered via agent
network
• Recipient uses MTCN
(money transfer
control number) to
collect cash
• Fees is between $ 15-
50
• Transfer is immediate
• No initial setup cost
• E card is a prepaid
loaded card from US
bank
• Inactivity fee $ 5 (180
days)
• Money can be
withdrawn from ATM
• Foreign transaction fee
of 1.49%
• Useful if money is to be
sent to family in China
Product Analysis

6. Mobile Wallet Companies comparison
• 1.2 billion global users
• Foreigners are not allowed to
do international transfer
• Chinese ID needed for transfer
• Transaction charges of 0.1%
for withdrawal of > RMB
20,000
• 18 currencies supported
• Backed by ANT financial
(Alibaba.com)
• 900 million global users
• In certain markets it can be
used to send and receive
payments e.g In South Africa
Partnership with global
payments technology
company, Adyen,to access
global markets
• Transaction charges 0.1% for
withdrawal >RMBY 1000 from
their WeChat balance
• 9 currencies supported
• Backed by social media giant
Tencent
• 150 million users
• 5.4 billion cards issued
• CUP has a fee structure that
far more closely resembles the
fees associated with their
plastic cards
• Most of the consumer
transactions are free.
Withdrawal above certain
value are charged 0.1%
• All major currencies supported
• State owned payment network

7. Comparison between various MTOs

8. Recommendation
There is no one fit solution for which product is the
best for receiving remittance in China.
However, looking at the regulatory restrictions &
cost factors, issuing an E-card in association with
China Union Pay(CUP) would be the best option
since it is 3rd largest credit-debit network in the
world with huge consumer base already using their
services. Transaction cost 1.49 % is still less than
most of the bank transfer fees or agent comissions.
Plus, looking at the regulatory restrictions, CUP
holds advantage since it is state run instituion

9. References
https://www.echineselearning.com/blog/how-to-use-banks-in-china
https://www.travelchinacheaper.com/how-to-send-money-to-china
https://www.finder.com/international-money-transfers/send-money-to-china
https://www.export.gov/article?id=China-Foreign-Exchange-Controls
https://www.finder.com/wechat-wallet
https://www.hongdaservice.com/blog/how-to-send-money-to-china-from-usa
https://www.travelchinacheaper.com/china-foreigner-payment-solution-ecard-review
https://nhglobalpartners.com/moving-money-in-and-out-china-rules/
https://financefeeds.com/alipay-vs-wechat-pay-vs-unionpay-important-research/
https://xendpay.com/countries/china/how-remit-money-china/