The Ministry of Commerce will take the lead in developing national service trade innovation development demonstration zones in 16 cities including Beijing, Tianjin, Shanghai, Chongqing, Dalian, Xiamen, Qingdao, Shenzhen, Nanjing, Hangzhou, Hefei, Wuhan, Guangzhou, Chengdu, Xi’an, Suzhou and Hainan Province, and build about 35 demonstration zones by 2035.
The overall plan released by the Ministry of Commerce shows that the construction of the demonstration zone will be promoted on the basis of the innovative development pilot of service trade, and cultivate a group of internationally competitive service export enterprises and key service industry clusters.
Among the overall plans, the facilitation of cross-border settlement of trade in services is most closely related to the cross-border payment industry.
The plan proposes to optimize the institutional environment for the convenient cross-border flow of capital, personnel, technology, data and other production factors, further promote the facilitation of cross-border settlement of service trade, explore enterprise credit classification management based on big data, and provide more convenience for the cross-border fund collection and payment of honest and compliant service trade enterprises.
Service export enterprises’ capital collection and payment efficiency, corporate credit management and cross-border settlement services, thus entering into clearer policy tasks.
Trade in services is different from traditional trade in goods.
For software services, digital content, gaming overseas, cloud services, consulting services, intellectual property licensing, cross-border marketing and other businesses, transaction credentials may come from contracts, orders, online delivery records, platform backend data, invoices and service confirmation materials.
Corporate receipts and payments usually extend to settlement, exchange, reconciliation, refunds, ledger sharing and material retention.
After the construction of the demonstration zone is advanced, banks and cross-border payment institutions will face more customers serving export enterprises.
In the past, the business focus of cross-border payment institutions was mostly on cross-border e-commerce, foreign trade sellers, platform merchants and overseas enterprises to collect payments.
After the service trade demonstration zone is launched, the weight of service export companies in the customer structure of cross-border payment institutions may increase.
Global collection accounts, multi-currency collection and payment, supplier payments, platform split accounts, batch payments, exchange rate management and transaction reconciliation will all become important factors when enterprises choose service providers.
Institutions that can connect financial services, contract materials, order data, invoices and dispute processing can more easily enter the daily collection and payment process of enterprises.
The scope of participation in the bank’s international business will also be expanded.
The overall plan proposes to encourage qualified demonstration zones to attract multinational companies to establish global or regional capital management centers and expand the integrated domestic and foreign currency capital pool functions of multinational companies.
This is closely related to the bank account system, foreign exchange services, cross-border RMB, trade finance and corporate treasury management.
Large banks have advantages in accounts, clearing, foreign exchange and capital pool businesses, while cross-border payment institutions are more flexible in multi-market access, platform collection, API services, reconciliation and accounting, and small and medium-sized enterprise services.
As service trade enterprises increase in the demonstration zone, the cooperation between banks and payment institutions will be further subdivided.
Facilitation will also increase risk control and compliance service requirements.
The overall plan mentions providing more convenience for cross-border fund collection and payment by honest and compliant enterprises, provided that the identity of the enterprise is authentic, the business is authentic, the transaction background is clear, and the use of funds can be verified.
Payment institutions need to embed customer identification, business operation authenticity review, transaction background material matching, abnormal transaction monitoring, anti-money laundering management and data traces into the collection and payment process.
The facilitation of cross-border collection and payment relies on classified management, and compliance capabilities will affect the depth of payment institutions’ participation in corporate collection and payment, bank cooperation and park services.
Digital service trade will also bring more small-amount, high-frequency, continuous and platform-based transaction scenarios.
SaaS subscriptions, AI services, cloud services, online education, in-game purchases, digital content, cross-border advertising and software licensing often involve automatic renewal, multi-currency collection, split settlement, refund disputes, tax processing and invoice matching.
Enterprise customers need cash flow to match orders, contracts, billing and delivery records.
If cross-border payment institutions can combine payment services with corporate operating data, financial systems and compliance material management, the depth of their services will be further enhanced.
The payment needs of the first 17 regions will diverge according to the industrial structure.
Beijing, Shanghai, Shenzhen, Hangzhou and Guangzhou have strong foundations in platform economy, digital trade, financial technology and service exports, and are suitable for the development of digital content, software services, cross-border platform services and corporate fund management.
Hainan can combine inbound consumption, tourism services, offshore trade and consumer payment facilitation.
Nanjing, Suzhou, Hefei, Wuhan, Xi’an and other places can combine software services, technical services, manufacturing servitization and industrial clusters overseas.
The impact of the construction of the National Service Trade Innovation Development Demonstration Zone on cross-border payments will focus on changes in service objects, transaction structures and compliance requirements.
The cross-border collection and payment needs of service trade enterprises are more dispersed, and the matching requirements between capital flow, order flow, contract flow and invoice materials are higher.
The competition between banks, cross-border payment institutions and corporate capital service providers will center on service collection, settlement, exchange, reconciliation, risk control, fund collection and compliance review for export companies.
