Analysis on the application of traditional and electronic payment methods in cross-border e-commerce
The current major participants in the global cross-border e-commerce payment market include banks, remittance companies, international credit card organizations and third-party payment institutions.
Bank wire transfer
Bank wire transfers generally use the SWIFT channel to achieve cross-border remittances. The fees are high and the transaction progress is slow. It usually takes 3 to 5 days to arrive in the account. It is suitable for large-amount remittances and payments. Traditional cross-border settlement mainly refers to international settlement tools such as remittances, collections, and letters of credit between banks, relying on the mature SWIFT system and clearing system, which is safe, stable, and reliable. However, traditional bank cross-border settlement has problems such as complex procedures, long cycle, and high costs, making it difficult to meet the cross-border business needs of small and medium-sized enterprises.
Money transfer company
Remittance companies usually have in-depth cooperation with banks, post offices and other institutions. They have many agent outlets and make remittances convenient.
International Credit Card Organization
International credit cards are cards issued by international credit card organizations, which allow overdraft consumption (consumption first and repayment later). Online B2C cross-border trade is dominated by international credit card organizations and third-party payment institutions.
Third-party payment institution
With the development of cross-border trade, especially the rise of cross-border e-commerce platforms, third-party payments that are simple to use, fast in settlement, and lower in cost are emerging. Coupled with policy incentives, third-party payments are currently Payment institutions have become important players in the cross-border payment market. Compared with traditional cross-border payment and settlement methods, cross-border e-commerce payment and settlement methods are constantly exploring and innovating technically.
Traditional payment methods
Traditional payment methods mainly include cash payment, bill payment, exchange, entrusted collection, and collection and acceptance. Bill payment instruments mainly include money orders, checks, and cashier’s checks.
Bill of exchange
A bill of exchange is a bill issued by the drawer and entrusts the payee to unconditionally pay a certain amount of money to the payee or holder at sight or on a specified date. Depending on the drawer, bills of exchange are divided into bank bills and commercial bills. According to different payment times, bills of exchange are divided into sight bills and usance bills. According to different acceptors, bills of exchange are divided into commercial acceptance bills and bank acceptance bills.
Check
A check is a bill issued by the drawer, and the bank entrusted with the check deposit business unconditionally pays a certain amount of money to the payee or holder when the check is presented. According to different forms of payment, checks are divided into cash checks, transfer checks, and ordinary checks.
Cashier’s Check
A promissory note is a note issued by the drawer, who promises to unconditionally pay a certain amount of money to the payee or holder when the note is presented. Depending on the drawer, cashier’s checks are divided into bank cashier’s checks and commercial cashier’s checks.
Cross-border payment settlement
Cross-border settlement refers to the international claims and debts arising from international trade (goods trade, service trade), international investment, etc. between two or more countries or regions with the help of certain settlement tools and payment systems to achieve cross-border funds. and cross-regional transfers.
Traditional cross-border payment and settlement methods commonly used in B2B cross-border trade
The commonly used payment and settlement methods in B2B cross-border trade mainly include remittance, collection, and letter of credit.
Remittance
Remittance, also known as remittance, means that the payer actively remits money to the payee through a bank or other means.
Collection
Collection refers to a settlement method in import and export trade in which the exporter issues a bill of exchange with the importer as the payee and entrusts the exporter’s bank to collect payment from the importer through its branch or agency bank in the importer.
Letter of Credit
Letter of credit (L/C) refers to a document issued by a bank (issuing bank) to a third party in accordance with the requirements and instructions of the (applicant) or on its own initiative and in compliance with the terms of the letter of credit. A written document by which payment is made by (the beneficiary) or his/her designee.
Market Trends
Traditional cross-border payment and settlement methods and cross-border e-commerce payment and settlement methods will complement each other and coexist for a long time. With the rise of cross-border e-commerce on the Internet, cross-border payment settlement is increasingly approaching our daily lives.