How to navigate cross-border payment challenges in restricted Asian markets

“Why do my invoices remain unpaid or delayed from my solvent Chinese clients?”
“How do I repatriate my profits generated in South Korea?”
“Is it possible for my partner in India to pay in rupee (INR)?”

Here in Asia, I’m often asked questions like these. Generally, there are two types of people who ask these types of questions: The ones who work for a company that struggles with cross-border currency restrictions and capital controls, and the ones who work for a company whose payers struggle with cross-border currency restrictions and capital controls.

If you fit into either group, you’re not alone. From small cross-border e-commerce startups entering new markets, to medium-sized enterprises operating in a few locations, to big multinationals with well-established financial and banking networks—all types of businesses can be impacted similarly by regulations, regardless of size, location, or industry.

It’s not uncommon to see finance teams with outstanding, unpaid, or delayed invoices refusing to sell or expand investments into particular Asian markets because of these payment challenges. So, how can they overcome these barriers and manage their payments effectively?

Truthfully, understanding all of the different in-country regulations is not a viable option for busy finance teams. There are language barriers, frequent regulatory changes, tax implications, unwritten or unclear procedures, and countless undercover complexities. Outsourcing this understanding is expensive and slow, and still requires finance teams to deal with each market’s requisite procedures in practical terms.

Costs aside, banks may not always be able to help unless your company has a local bank account in the country you’re trying to collect from. This often requires having a local entity in that market. Additionally, banks may not be able to help your company obtain the supporting documents that are frequently needed, and their relationship managers may not be available to support you and your clients around the clock.

Instead, a payment provider is typically your best option. Payment providers can offer local payment methods and solutions (B2B, B2C, etc.). They are also generally cost-effective and able to use their understanding of countries and local regulatory regimes to navigate in-market rules.

Not all payment providers are equal, though. In a later article, I’ll explain how to choose a payment provider. In short, you need to make sure their providers have robust financial and security procedures in place and are compliant with them, and ensure that they offer preferred and suitable local payment methods for their payers. Additionally, their ticket sizes (e-wallets, local card skims, local bank transfers, etc.) must have a flexible, scalable, and stable technological infrastructure. Also, depending on your company’s business operation needs, you may need to make sure that their currency coverage is suitable for your potential future expansions.

By exploring payment provider solutions, your company may find an ideal solution to currency restrictions and capital controls in Asian markets.