The ability to build and maintain relationships is an important business skill, especially if companies wish to do business in China, Raymond Qu suggests.
Mr. Qu is the CEO of Geoswift, a payment technology company which creates customized, one-stop cross-border payment solutions both to and from China.
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Geoswift also provides several services for consumers, Mr. Qu said, with one of their most popular being the facilitation of direct tuition payments from China to foreign universities.
Data from China’s Ministry of Education show 459,800 Chinese studied abroad in 2014, and 92 percent had the bill funded by family. Making payments from China, especially the rural areas, to foreign universities can be a cumbersome process given the controls and currency conversions.
Geoswift works with 800 universities, including 500 in the United States to facilitate direct payments to those institutions in local currencies through UnionPay, Alipay, Tenpay and other payment processors.
“It enables Chinese to pay in an easy way,” Mr. Qu said.
Another Geoswift service is the e-Cheque. Working with global card solution providers, the e-Cheque simplifies point of sale purchases, cash withdrawals, and card top-ups, Mr. Qu explained. It is popular with international travelers.
As commercial relationships between China and the world increase, both Chinese and foreign companies need to easily send money in and out of the country. That is as true for the small merchant operating online as it is for the large corporation buying and selling components or finished goods.
A company will likely accept payments from international customers by mobile, transfer and other methods and then need to turn around and pay its Chinese vendors on a set schedule. Difficulties ensue as the company navigates different cross-border payment regulations and pays high bank charges.
Geoswift creates unique solutions for each company based on payment frequency and the regulations of the countries where the client conducts business. That client uploads bulk payment and customized batch instructions to GeoGateway, which then performs consolidation, clearing, currency conversion, reconciliation, reporting and vendor settlement
Other Geoswift services include foreign exchange kiosks in eight cities made possible by a unique license granted from China’s Central Bank which allows a non-bank entity to run a retail foreign exchange business. They also have a prepaid card program operated in conjunction with branded card companies.
More open
“China is more open now,” Mr. Qu said.
Recent monetary policy changes have made it easier to move capital out of China than it is to place it in the country, he said.
China wishes to reduce its foreign reserves, especially of US dollars, he added, and are taking three steps. The first is to reduce the percentage of US dollars in its foreign currency basket. It dropped to 65 percent in 2014 from 85 percent in 2001.
Second the government is converting cash into assets like property. Finally they want to transform the RMB into an international currency.
China’s Central Bank has enacted many changes which international businesses need to be aware of, Mr. Qu said. Transactions in travel, education services and trading will be fully open, while with capital accounts transactions involving insurance and investments will be mostly open save for a few restrictions.
People who used to compete in one country are now conducting business cross border, Mr. Qu said. And if your expansion plans include China, make sure they include mobile shopping and payment options, as mobile phone usage is on the rise.
Mr. Qu is largely dismissive of reports of a Chinese economic slowdown.
“The growth rate is still 6.7 percent. China is growing and big financial opportunities are still there.”
“Any central bank can essentially control three things — the exchange, interest and inflation rates,” Mr. Qu explained.
“You cannot control all three at one time.”
In the past China always focused on the interest and exchange rates to the detriment of inflation, now they have traded the exchange rate for the inflation rate.
Mr. Qu also keeps a close eye on China’s booming peer-to-peer industry.
“It must be regulated or otherwise it will be a disaster in China.”
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