Yiwu, the world's largest wholesale market for small commodities in Zhejiang province, launched a global payment platform called Yiwu Pay, facilitating more than 900,000 market entities in Yiwu to connect to the world while reducing their payment risks. About 2.1 million micro, small and medium-sized enterprises along the supply chain will also be able to better connect to the global market and conduct easier and safer cross-border payments through the Yiwu Pay platform, according to a statement released by the Zhejiang China Commodities City Group Co (CCC Group), developer of the payment platform. “It is of great significance to have one more payment channel, especially as it is backed by CCC Group, which could improve the security of our daily transactions,” a Yiwu-based merchant surnamed Wang told the Global Times. Wang sells paper products to clients from over 10 countries and regions. “Our clients now basically pay us in Chinese yuan, but there are settlement risks as banks require more information on the sources of each payment.” According to Wang, it is very common for Yiwu merchants to receive cross-border yuan payments now, and Yiwu Pay will help reduce settlement risks and greatly increase the efficiency of their business operations.
Yiwu is unique in having a massive number of small and medium-sized companies selling small commodities to the world, making it necessary to develop its own payment platform, Dong Dengxin, Director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times. By providing a full range of trade and financial services, CCC Group is committed to reduce costs and enhance the efficiency of local market entities. Yiwu Pay has an industry-leading risk control system, which can carry out real-time monitoring of transactions to ensure their safety, the CCC Group said in a statement. Yiwu Pay has reached cooperation agreements with more than 400 banks and financial organizations across the world, with businesses covering more than 100 countries and regions and involving 16 major currencies.
Amid the growing trend of the yuan's internationalization, Yiwu has seen a growing number of trading partners using the Chinese currency to settle transactions. In December 2022, a local company received a cross-border payment in yuan from Saudi Arabian customers through Yiwu Pay before its official launch, CCC Group noted. A total of 176 countries and regions conducted cross-border yuan settlements with Yiwu in 2022. The total settlement amount came in at CNY56.54 billion, surging 56.23% year-on-year, according to CCC Group. Dubbed the “world's supermarket”, Yiwu has recorded robust growth in foreign trade in spite of the Covid-19 pandemic. In 2022, the total trade value of Yiwu reached CNY478.8 billion, up 22.7% year-on-year, according to data from local customs, the Global Times reports.
The China Daily adds that as a growing number of merchants in Yiwu turn to cross-border e-commerce, the efficiency of payments and settlement of transactions becomes increasingly important, said Zhu Yue, a vendor who has a store at the Yiwu International Trade Market. “However, services provided by traditional payment channels such as SWIFT and banks are increasingly lagging behind, slow and costly, and even come across as a burden for merchants like me,” he said.
With Yiwu Pay, which supports a variety of payment apps and methods, such as Apple Pay, Alipay and UnionPay, money paid by Zhu’s customers through the platform can instantly be accessed and cashed out in RMB in his account. Zhang Gangfeng, Associate Professor at Zhejiang University’s School of Management, said this can greatly help reduce risks from market fluctuations and increase the rate of capital turnover. “Traditional cross-border transfer platforms like SWIFT were designed mainly for business transactions worth a certain amount of money,” Zhang told China Daily. “They are ill-equipped for the rapidly expanding customer-to-customer and business-to-customer cross-border e-commerce markets.” Figures from Yiwu Customs indicate that the city’s total import and export value in 2022 stood at CNY478.8 billion, of which CNY431.64 billion was from exports, a year-on-year increase of 18%.
