LONDON, February 27, 2012 /PRNewswire/ --
Western Union Business Solutions, a business unit of the Western
Union Company (NYSE:WU), a leader in global payment services, today
released new research showing UK importers are costing themselves
£180 million pounds in unnecessary fees by not paying Chinese trade
partners in renminbi (RMB).[1]
The study surveyed 1,000 Chinese businesses on their experiences
in dealing in the RMB. The results show that more than one third
(36%) would rather be paid in RMB, with 23% of those asked naming
exporter convenience and reduced forex risk as the main drivers for
this preference.
Despite this appetite, however, 91% have not seen an increase in
RMB payments. Perceived buyer reluctance was the main reason
attributed to this number, with over 50% naming client
inconvenience (33%) and difficultly obtaining RMB (20%) as the
cause.
One in five of those surveyed also said the reluctance of their
customers to pay in RMB forced them to add, on average, 3% in fees
to protect against currency fluctuation risks.
Another result of this reluctance is a clear hesitance on the
part of Chinese companies to speak about RMB settlement with their
buyers and risk being rebuffed; 42% of the businesses who have a
clear preference for renminbi payment have never even asked to be
paid in their native currency.
Neil Graham, Regional Divisional
Director, UK, for Western Union Business Solutions, said:
"What we are seeing here is a lack of education among UK
importers about renminbi and how easy it has recently become to
conduct trade with it. Businesses are used to paying in USD
and are unaware of the vast amount of money their reluctance to
change their approach is costing them."
"The number of Chinese companies conducting business in RMB will
continue to grow and the renminbi's ongoing liberalisation means
Chinese exporters will increasingly demand payment in their local
currency. Savvy businesses in the UK and Europe who change their approach to
cross-border payments and trade in RMB will benefit from improved
trading terms and relationships with their Chinese suppliers; those
who do not will be behind the curve."
The markets seen as most reluctant to pay in RMB are the
USA (42%), Europe (23%) and South East Asia (13%), with Japan (8%) and Australia (2%) seen as less unwilling.
Among the companies that have been successful in billing their
trading partners in RMB, 79% say they are happy using the currency
to settle international business.
Graham continued: "The problem here is lack of communication.
Companies outside of China are not
aware there is a real appetite among Chinese businesses for
renminbi payments. Coupled with Chinese suppliers' hesitation to
ask for RMB in the face of perceived buyer reluctance, particularly
in Europe and the US, and you get
a no-win situation. If British businesses, however, were to break
this cycle and offer to pay in RMB, it would strengthen their
relationships with their Chinese suppliers and give them a
competitive advantage in the Chinese marketplace.
Trading in RMB will also save them money, reducing their
exposure to hidden fees while improving transparency, cost
management and efficiency."
Western Union Business Solutions, which recently acquired
Travelex Global Business Payments, is dedicated to helping UK
businesses understand FX and manage their cross-border payments.
It was the first non-bank to offer businesses the ability
to make direct renminbi payments into China through its GEO Global Clearing
network, which provides easy access for a wide range of small
businesses and corporations who previously had to rely on a
relatively small number of major banks.
Notes to Editors:
About Western Union Business Solutions
Western Union Business Solutions enables companies of all
sizes to send and receive international payments and manage foreign
exchange, creating unique solutions tailored to suit their FX
needs. Western Union recently acquired Travelex Global Business
Payments and is a leading nonbank provider of cross border
payments, operating its Business Solutions services through locally
licensed affiliates in 23 countries. Supported by a network
of trading offices, strategic banking relationships and a global
clearing network, businesses can send cross-border payments in
more than 140 currencies. © 2012 Western Union Holdings, Inc.
All rights reserved.
Western Union Business Solutions services in the UK are provided
by Custom House Financial (UK) Limited or Travelex Global Business
Payments. Custom House Financial (UK) Limited (registered in
England, Company Number 04380026,
Registered Office Address: 2nd Floor, 12 Appold Street,
London EC2A 2AW) is authorised by
the Financial Services Authority under the Payment Services
Regulations 2009 (Register Reference: 517165) for the provision of
payment services and is registered as an MSB with HM Revenue &
Customs (Registered No: 12140130). Travelex Global Business
Payments Limited (registered in England, Company Number 02854737, Registered
Office Address: 65 Kingsway, London, WC2B 6TD) is authorised by the
Financial Services Authority under the Payment Services Regulations
2009 (Register Reference: 536611) for the provision of payment
services and is registered as an MSB with HM Revenue & Customs
(Registered No: 12122416).
"Travelex" is a registered trademark of Travellers Exchange
Corporation Limited and is used by Travelex Global Business
Payments Limited and its affiliates under license
About Western Union
The Western Union Company (NYSE: WU) is a leader in global
payment services. Together with its Vigo, Orlandi Valuta, Pago
Facil and Western Union Business Solutions branded payment
services, Western Union provides consumers and businesses with
fast, reliable and convenient ways to send and receive money around
the world, to send payments and to purchase money orders. As of
December 31, 2011, the Western Union,
Vigo and Orlandi Valuta branded services were offered through a
combined network of approximately 485,000 agent locations in 200
countries and territories. In 2011, The Western Union Company
completed 226 million consumer-to-consumer transactions worldwide,
moving $81 billion of principal
between consumers, and 425 million business payments. For more
information, visit http://www.westernunion.com.
1. Western Union Business Solutions' research found that one in
five Chinese exporters added an average of three per cent in fees
or surcharges to account for FX risk associated with receiving $USD
payments. Based on HM Revenue & Customs figures for 2011, there
was £30.2 billion worth of merchandise imports from China into the UK. On this basis the value of
FX related fees charged by Chinese exporters is approximately
£180million, or three per cent of the value of one-fifth of UK's
total imports from China.