This release is posted in Finextra and announces a funding round for a 2017 Chinese startup named XTransfer, which provides cross-border services for SMEs. A quick review of the website indicates payments and collections services for Chinese companies in various foreign currencies.
Generally speaking, many are unaware of the startup market in China, and some tend to think of Alipay and WeChat Pay as dominant fintech payment forces. However, there is relatively vibrant VC activity going on and the cross border space is jumping with new stuff, as those who follow it will know.
‘The latest round was led by Telstra Ventures, together with MindWorks Ventures and existing investors…Bill Deng, founder and chief executive of XTransfer said the funds will be used to further expand its global financial network, strengthen its data capabilities, improve its anti-money laundering (AML) and risk control capacity and deliver better services to customers. This funding round will also fuel their organizational upgrade to attract more high-caliber talents globally.’
The list of services mentioned includes AML, and we assume through partnerships with correspondent banks, there is also some KYC capability. So that takes some pressure and cost off the shoulders of SMEs. We have not received a briefing on the XTransfer offerings but the B2B focus is certainly timely and on point. As are most things associated with 2020, the resiliency of SMEs to continue trade and e-commerce is key to future growth as we move out of lockdown and supply chains open.
‘After 25 years of growth, the B2C real-time payment sector has seen a host of titans such as PayPal, Square, Stripe and Alipay,” says Deng. “We believe the vast opportunity lies in the B2B digital payment.”
…”We’ve noticed that SMEs exhibited a great deal of resilience and vitality in the face of crises and we believe firmly in the mission and vision to serve SMEs. In the area of containing risks inherent in cross-border capital flows for SMEs, we experienced firsthand the enormous challenges therein: For one thing, serving SME traders carries a huge risk as their transactions are rather low in value and high in frequency. For another, risk management is difficult and costly. The lack of risk awareness and internal control procedures is prevalent among SMEs. They dealt in a complex array of goods, transacting with different partners from diverse geographic locations. What’s more, the B2B industry lacks a comprehensive, standard and structured source of data, which we enjoy as a core competence as one of reasons why we can offer a smooth customer journey on our platform.”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group