Preferred cross-border B2B payment methods in Asia
Managing cross-border payments and handling funds internationally can be difficult for B2B companies. You want to be able to make payments to suppliers and partners, receive money from clients, and pay expenses, but without having to pay high fees or use insecure, hard-to-track payment systems.
B2B businesses in Asia find it particularly tough, because there are so many different currencies. There are also a wide range of economies, some that are highly developed like Singapore and China, and others like Indonesia and Malaysia which are still developing.
It doesn’t help that different countries have different payment preferences. Top payment choices range from credit cards to ewallets, with each country embracing a different platform. Consumers in many countries also prefer cash, which affects your choices for B2B transactions. But new digital payment solutions like Payoneer can help you juggle all these different economies and preferences.
The more you know about the different B2B payment preferences in Asia, the better you’ll be able to choose the easiest, lowest-cost, and most secure payment system for your business.
Credit cards
Credit cards are the most popular option for international and domestic online payments in Japan, Singapore, and Taiwan, although in Japan they are mostly used for domestic transactions. They are also used for international payments in China.
Credit card payments are easy to make, easy to track, and funds usually clear relatively fast. Businesses often prefer credit cards because there’s a time lag between making the payment and having the money leave your account, which can help with cash flow issues.
But in other Asian countries, especially in emerging economies, they are less popular, mainly because large sections of the population are unbanked, and credit cards require a lot of paperwork. It’s thought that over 174 million adults in Asia don’t have a bank account or credit cards. In Indonesia, only 4% of people use credit cards.
Even those countries that have a history of credit card use are starting to fall out of love with them, because of the high fees. Newer payment options like mobile payments and e-wallets are seen as much more convenient.
E-wallets
Numerous countries across South-East Asia are jumping straight from cash to ewallets, which are preferred over credit card payments in India and Indonesia. Different countries have different favorite platforms, including Paytm which is used by 85% of shoppers in India, TrueMoney in Thailand, and PayPay and RakutenPay in Japan. It’s predicted that 84% of people in Southeast Asia who already have bank accounts, and 58% of those without bank accounts, will use e-wallets by 2025.
But e-wallets have their drawbacks too. Asia has a lot of different digital payment providers which don’t integrate well with each other. Most providers only serve one currency, so it can be difficult to use them for cross-border payments, and some are less secure than others. Also, many have poor tracking tools, which make it difficult to check what happened to your payment if something goes wrong.
Digital payments
QR code payments and mobile payments are the biggest payment trend across Asia, including China, India, and South-east Asia. Both consumers and B2B buyers appreciate them because they are so convenient and easy to use, and don’t require you to have a bank account. It’s cheaper for merchants to offer QR codes for mobile payments than to support credit card payments. They are so popular that in India, at least, even the central bank has launched a smartphone payments app, and in China, the most popular methods of paying for ecommerce transactions are AliPay and WeChat Pay.
But for now, mobile payments in Asia are generally used only within the home market, because of rules that restrict mobile payment platforms from supporting cross-border transactions. Other digital payment solutions that aren’t based on apps can and do enable cross-border transactions, and are one of the most often-used payment methods. Digital payments are quickly pushing out credit cards, especially for cross-border payments which can bring high fees.
Bank transfers
Bank transfers are usually secure and easy to track, but they can also come with expensive fees and sometimes take a long time to clear. In Asia, bank transfers through traditional payment services like SWIFT are not very popular.
Only a handful of countries, namely Malaysia, Singapore, and South Korea, see bank transfers used for a significant percentage of transactions, mainly cross-border transactions. In these cases, they tend to use digital online bank transfers. Online bank transfer services are the most popular online payment method in Malaysia.
An easier way to manage international B2B payments
Payoneer’s online payment solution allows B2B businesses in Asia to quickly and easily make cross-border payments for low fees, combining the best of ewallets, credit cards, and bank transfers together with low-cost currency conversion. Payoneer is integrated with two major Asian wallets, G-Cash (Philippines) and JazzCash (Pakistan), making it easier for people who hold these ewallets to send and receive international payments.
Once you have a Payoneer account, it can function like an ewallet, offering flexibility to use your funds however and wherever you like. Pay other Payoneer users through the network in over 150 local currencies free of charge. Payoneer also offers local receiving accounts in Hong Kong dollars, Singapore dollars, Australian dollars, Japanese yen, and Chinese yuan, so you can give local account details to clients in each market.
You can use Payoneer to accept and make payments easily across all the most popular payment types in Asia, including credit card payments, digital payments, and low-cost cash withdrawals.