Citi announced that its Global Transaction Services unit has continued to make enhancements to its WorldLink(R) Payment Services capabilities for making payments in exotic currencies, such as the Chinese Renminbi (RMB) and Iraqi Dinar (IQD).
In addition, WorldLink has developed its network to support current and future exotic currency offerings. These enhancements allow for significant reductions in settlement time, increased visibility of important transactional details and a reduction of volume capacity against exotic currencies.
The controlled liberalization of the Renminbi (RMB) in 2009 by the People’s Bank of China (PBOC) had been a long anticipated opportunity in the continued globalization of the world economy. Since then, the Chinese government’s continued expansion has allowed WorldLink Payment Services the opportunity to further develop its capabilities in making cross-border payments in RMB.
Earlier this year, in January 2011, Citi announced how the regulatory reforms enabled it to significantly reduce the settlement timeframe for receipt of RMB payments to beneficiaries. Because the currency was so heavily restricted, special processing measures were put in place to accommodate the regulations. These measures increased the average receipt time of payments to beneficiaries. Utilizing WorldLink’s unique intelligent distribution capabilities, payments to approved corporations in China could now be received by the beneficiary in as little as two business days and without any volume restrictions — a significant benefit to clients.
At that time, RMB payments could only be made to approved corporations. In August 2011, further extension on the scope of RMB settlement was announced by the PBOC. In effect, WorldLink clients can now make RMB payments to a corporation (for the trade of goods) in the whole nation of China, without the requirement of the corporation being approved — in other words, a Mainland Designated Enterprise (MDE). As a result of this, clients have a broader opportunity for which they can now send RMB payments to China, allowing their beneficiaries to gain from faster settlement times and giving themselves increased visibility of the payment and foreign exchange.
WorldLink(R) Payment Services has been making IQD payments on behalf of selected clients since 2006 adding to the exotic currencies suite. With the success established over five years, WorldLink has differentiated itself by having local expertise and strong banking relationships in Iraq. WorldLink is now offering IQD payments as a fully developed and proven offering to all relevant WorldLink clients.
While the US Dollar remains a widely accepted currency in Iraq, Citi’s cross-border payments specialists anticipate that IQD payments will gain an increasing foothold in support of foreign direct investments.
“Making payments into new countries doesn’t have to be risky or intimidating for clients; the liberalization of markets especially those in the Middle East and Africa are going to undoubtedly change the global economy in the near future. Providing payment options in local currencies is just one step towards building solutions for our clients looking to do business or invest further in these markets.” said, Michael Vallance, Global Head of WorldLink(R) Payment Services at Citi.
To remain focused on exotic currencies with a view to further enhancements, WorldLink Payment Services has expanded its network to fully optimize the current exotic currency offering. This expansion will see a greater capacity for current exotic currencies and will provide the opportunity in the future to bring to market new currency offerings
Vallance continued, “The payments landscape is changing rapidly and we are watching governments realize the power of their local currencies. It has become imperative to prepare as the shift from the traditional world currencies is being hedged by rising local currency payments. Adding capabilities to bolster cross-border payments capabilities in exotic foreign currencies is a necessary step, not just for Citi, but for any payments provider who is looking to keep pace with expanding client needs and globalization.”