China's Cross Border B2B Payments are disrupted

Mainland China continues to grow and expand its reach into various industries across the
world. There is increasing pressure on China to fix the B2B cross border payment issue
which has been a major problem for its current system. The cross-border B2B payment issue
is a significant issue for medium and small-sized businesses which are not able to access the
banking system in China because of the regulations in China. The B2B payment bottleneck
impacts businesses that do business with SMEs in China and abroad.

Monopoly in Chinese Banking B2B Payment Monopoly

There are three options for making B2B payments to China. The first , and the most widely
used is the bank transfer, sometimes referred to a telegraphic transfer. Telegraphic transfers
are the most efficient option to transfer payments across borders to Chinese companies
located on the mainland of China. This is a difficult option for SMEs to obtain as they might
not have the capital or paperwork necessary to authorize the bank transfer within China or
payments made into China. Additionally, it can also be difficult to prepare for the telegraphic
transfer.

The bank transfers tend to be completed within five business days from the day of the
transaction. For funds to be electronically wired to their accounts, the receiving business may
need to transfer paperwork and personnel to China.

Even though SMEs and new firms may be able fulfill all requirements to send and receiving
money via electronic transfers, it's an issue that Chinese banks have a strict policy of limiting
access to bank transfers by small financial institutions and businesses that are not banking.
There are 4500 Chinese banks that can make and receive bank transfers.

It is an impressive number, but it does not satisfy the needs of the market. The countless
transactions that go back and forth across China's borders create a bottleneck in the
systemthat cannot satisfy the demands of the market.

Electronic Payments

China's mainland consumers have been increasingly adopting electronic payments. In 2018,
92 percent and 47% rural consumers in mainland China utilized smartphones to pay for
goods regularly. WeChat Pay is the main service provider. Alipay is also a popular option.
The simplicity of these transactions is unparalleled. The buyer simply scans the QR code of
the seller and the payment is processed through the buyer's mobile phone.

Merchants that aren't located in China can make use of these services to sell goods to
Chinese tourists. Electronic payments can increase the chances of Chinese customers
purchasing products. Their purchases could amount to 25% of the sales of a brand in a
single year. However, merchants need to sign up with the Chinese payment system so that
their sales can be processed through this system. If a company has fewer contacts or any
business activity in China this may pose an enormous challenge.

Cash on Delivery

Chinese consumers are using cash on delivery as their preferred payment method. It is more
well-known than electronic payments or bank transferssince it can be utilized by people with
no online accounts or who don't have the necessary technical knowledge. COD is a preferred
method of payment since customers can inspect the quality of goods before they're paid for.
For a nominal fee the non-banking service provider will provide this service and then refund
the balance of the amount to the seller. Thus, everybody wins when using this system. The
top third party payment service providers that are not banks include Dangdang, Amazon, and
JD.com.

The drawback of this method is that a third-party is required to pay to transport the items and
to handle payment. The involvement of a third party in the transaction could increase the
amount of time needed for the seller to take in customers' payment, and also reduce the
revenue from such payments due to third party transaction and service charges. At the end
of the day, it's best for both the customer and seller to remove any third parties involved in
transactions. This can simplify the delivery and movement of money from sellers to
customers.

Financial Sector Innovation is driven by SMEs

In 2015, more than 60% of the trade with foreign countries was managed by mainland
Chinese SMEs. They are the major driving force behind rapid development in the field of
fintech and e-commerce solutions to international e-commerce concerns. Currently, mainland
China's SMEs are the main force driving the disruption to the Chinese banking system as
well as the revolutionary adjustments to how cross border payments are processed in and
out of China. SMEs additionally serve markets that bigger established businesses
cannotserve, which will add to the pressure on China's banking system to simplify and make
commercial transactions more efficient, which will allow smaller, less established businesses
to expand and cater to China's expanding commercial needs.
As the Belt Road project expands, and larger businesses must focus on the Chinese
government's demands to expand their businesses going, small and medium-sized
enterprises will serve the needs of the less wealthy and powerful. These SMEs need access
to banks, as well as the people they serve.

B2C and Fintech

In the longer term Aleta Planet's answer to the bottlenecks across borders and its service for
payment delivery is quicker than traditional bank transfers, and more simple, easy
transactions mean that it is fueling growth in local industries. Growth in the fintech and SME
sectors can benefit from these innovations. Furthermore, these technological advances have
fueled B2C cross-border spending in e-commerce which in turn is driving development of
Fintech solutions for B2C transactions.

It is crucial to ensure to ensure that there are no obstacles to the flow or goods of both goods
and money across China's borders as the Chinese mainland economy transforms into
becoming a more consumer-oriented economic system. AP-1 Business platform payments to
Chinese suppliers are more secure and are able to receive payments on time.

Fintech to save the day

Fintech companies have noticed a shortage in the market of services. Their customers,
including small- and medium-sized businesses, online sellers, and newly established tech
firms are demanding better financial services and services. Fintech firms combine
technology, finance and creativity to create innovative solutions that allow SMEs to overcome
the limitations and operate more effectively.

These companies aim to help make cross-border B2B payments simpler, more manageable,
less hassle-free, and a preferred method to conduct business with China. Aleta Planet is one
of the companies that are leading the way. Aleta Planet created a system that utilizes the
UnionPay network to facilitate payments into and out China. This allows regular foreign
payments to be sustainable.

AP-1 Business

AP-1 Business, a digitized account for businesses outside of China it is available. The
business account can make transfers in T+1. This is the top aspect of AP-1 business.
Transfers to banks are typically accessible in T+5 or higher and AP-1 Business can provide
payments in T+1. This speedy and dependable access of payments is because AP-1
Business relies on the UnionPay network. As such, the payment is transferred from an
offshore UnionPay account (AP-1 Business) to an onshore UnionPay account that belongs to
the supplier in China.

There are still other notable benefits to making use of AP-1 Business. The entire array of AP-
1 Business's advantages make it a great choice to foreign businesses that do business with
Chinese companies.

Key Features

All-in-One Service

AP-1 Business is an all-in-one service that makes it easy for customers to make and receive
payments. It is a service that can be utilized by those who are not natives of Singapore.
There aren't any limitations for foreign owners or shareholders on the opening of business
accounts through AP-1 Business. AP-1 Business permits companies to open business
accounts in Singapore without the presence of directors of companies.

As a part of in the UnionPay platform, AP-1 Business has the ability to offer superior
customer support and all-in one services for its customers. UnionPay is accessible in China
and is used by all Chinese banks and financial institutions. AP-1 Business has eliminated the
middleman from the equation by using this platform.

In contrast to banks that must transfer money through banks intermediary bank, such as
other banks, funds that is transferred through AP-1 Business may be directly transferred to
the account of the person who received it. AP-1 Business also permits users to withdraw
cash from ATMs throughout the globe. The system is supported by Visa as well as Huawei
Pay. The ATM cash withdrawal facility will begin operation in the second quarter of 2021.
Attractive Foreign Rates

Another feature that is appealing to customers of AP-1 are the forex (FX), rates. AP-1
Business provides direct FX rates (SGD to RMB) for China via the UnionPay network. The
rates for FX are competitive when you consider that a lot of online payment services offer
lower rates for FX and charge their customers a cost for moving funds across national
borders. The AP-1 Business guarantee that its clients receive the highest FX rates when
cross-border payments are required.

There are no minimum balances needed or deposit requirements.

Additionally, AP-1 Business does not have its customers maintain the minimum balance, or
make minimum deposits into their accounts, in contrast to other accounts for business. A few
SMEs were able to keep their businesses running despite having to deposit funds and
maintain an adequate balance throughout the COVID-19 epidemic. They did not recover as
quickly but not completely. AP-1 Business aims at providing innovative financial solutions
that are not available through the banking sector.

AP-1 Business customers are able to conduct cross-border transactions using China through
the AP-1 Business virtual credit card. The card operates similarly to a pre-paid debit card,
making purchases and taking payments directly from your bank account.

The use of an AP-1 Business Card allows customers to skip the tedious and long-winded
procedure of clearing payment in the first place, providing documentation, or other
procedures required by banks to make transborder transactions via bank transfer. This is a
win-win situation for SMEs who participate in cross-border B2B or e-commerce transactions.

Aleta Planet's Roadmap for the Future

Aleta Planet, like other fintech companies, has seen massive growth and continues develop
as the Chinese economy grows and more online commerce transactions rise. Despite the
fact that the COVID-19 pandemic had a negative impact on the Chinese economy, China
was the only nation to see both normal economic growth and an improvement in economic
growth.

Conclusion
In short the three systems that are used to process commercial transactions on mainland
China do not have the flexibility required and aren't easily accessible by non-Chinese and
foreigners of China. The AP-1 Business system from Aleta Planet helps solve this issue by
giving offshore businesses ease of access to Chinese products and services. The ease of
access and simplicity is crucial to the development of Chinese SME's, a Chinese consumer
economy. AP-1 is a leading player in this sector, helping sellers and buyers to get around
China's business bottlenecks and expand their business.