Cross-border CNY payment available through FTZ

PBC’s Head Office in Shanghai has stated that Allinpay, 99Bill, China Pay, Dongfang Electronics and Shengpay are now allowed to process cross-border payments in the Chinese currency for cross-border trade in the China (Shanghai) Pilot Free Trade Zone.

Based on the service, the five payment firms will open a cross-border CNY account at the Shanghai branches of Industrial and Commercial Bank of China, Bank of China, China Construction Bank, China Merchants Bank and China Minsheng Bank to park provisions for cross-border CNY payment. The service requires no currency exchange procedure, and makes online shopping possible from offshore websites for regular Chinese shoppers, according to Chinese media reports.

By taking into account the central banks guidelines, companies that have online payment service licenses and are either incorporated in Shanghai or run subsidiaries in the free trade zone are eligible to provide CNY settlement for cross-border commerce of products and services.

The Shanghai FTZ was launched in September 2013 to transform the CNY into an international currency and hence, providing financial liberalization.

Speaking in numbers, CNY’s market share in the traditional financial trade grew to 8.66 percent in October 2013 from 1.89 percent in January 2012, according to the global transaction services organization SWIFT. CNY only ranks behind the USD which remains the leading currency with a share of 81%. EUR has retreated to third place with a market share of 6.64 percent in October 2013.

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