China Smashes the Time and Cost of Cross-Border Payments

Perhaps the future of cross-border payments is with us. China has now completed its first outbound payment via Cross-Border e-CNY Transfer Services platform (CBETS) to Malaysia, settling a 43,000 yuan shipment of fresh durian. The transaction was executed by China Construction Bank’s Xiamen branch in coordination with its Labuan branch in Malaysia, using direct bank to bank ledger transfers and on the fly conversion into Malaysian ringgit.

Compared with traditional correspondent banking networks operating under the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system this cut the time required to complete settlement to 30 minutes from one to three days and eliminated clearing fees of up to 6% and per transaction charges of $25 to $35 ¹.

Clearly, the race is on to change cross-border payments.