Cross-border payment settlement refers to the cross-border transfer of funds between different countries and regions, involving the settlement, sale, receipt and payment of foreign exchange for different funds. For example, when making cross-border online purchases, due to different currencies, it is necessary to use certain payment systems and settlement tools to convert funds between the two places and finally complete the transaction. In theory, financial institutions such as banks, card organizations, and third-party payment companies can implement this process. Cross-border electronic payment settlement, including the payment and collection of “foreign exchange”, is currently the most dynamic development of third-party payment.
The third-party payment collection and payment commonly used by domestic e-commerce, also called online acquiring, guarantees intermediate transactions and collects commissions. It is a settlement service based on local currency. Cross-border payment involves foreign exchange exchange and capital flow, transaction settlement and inter-bank settlement, and the integration of financial services between countries. The security, convenience and regulatory requirements of its transactions are more complex.
On the one hand, payment institutions assume some foreign exchange policy implementation and management responsibilities in the management of cross-border foreign exchange receipts and payments. They are similar to designated foreign exchange banks, but payment institutions mainly provide monetary fund payment and settlement for e-commerce transaction entities. Services are a type of payment and clearing organization, but are different from financial institutions.
In a sense, in the process of realizing cross-border transfer of funds with the help of payment channels and settlement tools, many traditional foreign exchange controls have been weakened. On the other hand, the traditional foreign exchange management system has been difficult to adapt to cross-border network transactions. In the case of fragmented exports, it is difficult for foreign exchange receipts and payments monitoring to obtain real transaction data on fund transfers. Many fund flows are outside the scope of supervision, which to a certain extent results in distortion of data on trade volume, foreign exchange settlement and sales, and balance of payments statistics. Leave survival needs for underground banks. Due to issues such as income tax and slow procedures, many companies still do not cooperate in using the Sunshine Foreign Exchange Settlement Channel despite it being available.