The e-CNY wallet is convenient and easy to use, and it offers a number of advantages over traditional methods of payment. With this wallet, you can load money onto your phone or electronic device and use it to make purchases anywhere that accepts electronic payments. As one participant put it, it has become very hard to use old fashioned cash.The e-CNY wallet is a new way to store and use Chinese Yuan. There as also a discussion about cash pooling: this works in China.īottom line: China is at the forefront of innovation in dematerialised payments. While possible, this requires a lot of IT work. One participant has experience of linking their IT systems directly to the banking system, to get reporting from all their banks.One participant was struggling with customers who have operations in both mainland China and Hong Kong, and who regularly make payments out of the wrong entity.One participant is using Pcards for small value purchases – but this is not easy.Participants are using a variety of local and foreign banks: ICBC and Bank of China got the most mentions amongst the Chinese banks, with a spread across Citi, HSBC, Standard Chartered and Deutsche Bank for the foreign ones.
On the payments side, most participants are making payments via the banks’ host to host systems, or using the payment tools in their TMS products. Some participants are making payments by endorsing customers’ BADs to their own suppliers. One participant is introducing controls to ensure BADs are only accepted if drawn on banks with an acceptable credit profile. Most B2B collections still go through bank transfers or BADs (Bankers’ Acceptance Drafts). The solution is to require all collections to go via the third party providers, who are under instructions to only remit the cash to the Company’s bank account. Another issue was that, in some cases, sales teams had opened Alipay and WeChat Pay wallets for customers to pay into – but there was no way to stop them from taking this cash to pay themselves. One company is using virtual credit cards to solve some of these issues, while one is routing payments made on AliPay and WeChat Pay via credit card providers to get the automated expense reporting. One participant’s company was doing extensive auditing of travel expense claims, but this is expensive. Allowing employees to use Alipay and WeChat Pay generally raised problems in terms of obtaining adequate receipts. The low acceptance of credit cards in China complicates the automated links which often exist between credit cards and T&E management and control systems. There was a lot of discussion about travel expenses. The third party companies do provide detailed lists of payors, but it can be difficult to upload these into the ERP system. The one complaint all participants had was the difficulty linking this process to internal systems, for the reconciliation of receipts or for compliance purposes in terms of identifying the source of cash. There was no mention of billbacks, the excessively high fees and acquirors which blight the use of credit cards in other countries. One participant did an RFP, with two Chinese and two foreign banks, and found the service was identical – though pricing was different, and not transparent. The collections process using these tools is efficient and effective: you work with a third party (usually accessed via a banking provider), who will transfer the funds to your account the following day. None is using these tools to make corporate payments. Most participants are accepting payment using WeChat Pay and Alipay. 
This report is based on a Treasury peer Call which explored how this is affecting members’ companies, and how they are adapting to this brave new, digital, world. This is a challenge when there are no credit cards. China has been at the forefront of a lot of digital trends, partly due to the fact it had an antiquated banking system which has been thoroughly modernised, and partly because the explosion of internet shopping in the country required a digital payments solution. Cryptocurrency, digital wallets, virtual everything – there is a huge amount of change.
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