Klasha is simplifying China- Africa trade with cross-border payments
China-Africa trade relations have seen remarkable growth over the years, but the complexity of cross-border transactions has often posed significant challenges for businesses on both sides.
The emergence of financial technology (Fintech) solutions has played a crucial role in streamlining global trade processes. Among these, Klasha has emerged as a key player, providing cross-border payment solutions to African and Chinese businesses.
In this article, we'll explore Klasha’s role in simplifying China-Africa trade.
Understanding China-Africa trade
China-Africa trade has a long history dating back centuries but has gained significant momentum in recent decades. The trade volume between China and Africa has increased substantially since the early 2000s.
China is now Africa's largest trading partner and its fourth-biggest source of investment. Bilateral trade between China and Africa stood at 282 billion U.S. dollars in 2022. In the first four months of the year, China's new direct investment in Africa reached 1.38 billion dollars, up 24% annually.
Africa and China's bilateral trade relationship has seen China import oil, minerals (like copper, iron ore, and cobalt), and agricultural products (such as soybeans, cotton, and timber). African countries, in turn, import a wide range of manufactured goods from China, such as electronics, machinery, textiles, and consumer goods.
In addition to trade, China has been making substantial investments in Africa. Chinese companies are involved in infrastructure projects, including roads, railways, ports, telecommunications, energy, and manufacturing. These investments aim to facilitate trade and stimulate economic development in Africa.
Africa has become China's increasingly important trade partner, with trade volumes growing substantially. However, this growth has come with its fair share of challenges, including complex payment processes, currency exchange issues, regulatory and compliance issues, and the need for secure cross-border transactions.
In response to these challenges, Klasha offers innovative cross-border payment solutions to fortify trade ties between these entities.
How Klasha is simplifying China-Africa trade
As an African cross-border payment solution provider, Klasha is poised to ensure that it provides payment solutions where the traditional banking system fails. Klasha helps businesses across the world easily manage cross-border online payables and receivables in one place through a Klasha Business Account. Klasha has a library of cross-border payment solutions that enable seamless trade relations between Africa and China. Let’s see how these payment solutions are transforming China-Africa trade relations.
International money transfer: Klasha makes it easy for African importers to pay their Chinese suppliers seamlessly with their local African currencies through the money transfer feature of a Klasha Business Account. At the same time, their Chinese counterparts get the equivalent in USD, EUR, CNY, EUR, GBP, INR, and more. With Klasha, the complexities of currency exchange are eradicated.
Before now, African importers would have to search for a trusted currency exchanger who would convert their local African currencies to Chinese yuan to pay their suppliers. Currency exchange and the transfer process could take many days. But with Klasha’s payment solution, African importers can wire funds in T+ 1-3 days to their Chinese suppliers.
Pay-ins: Klasha facilitates cross-border trade between China and Africa by providing a secured payment gateway that accepts payments in African currencies. This means African importers and consumers can pay their Chinese suppliers who own a website or mobile app in their local African currencies and money methods through Klasha’s payment gateway once it’s integrated into the website or app. The Chinese suppliers, in turn, receive the payment in any currency of their choice.
With Pay-ins, sometimes called Klasha Pay, Chinese merchants can now expand their business to Africa, knowing they can sell to their customers online in different African countries without worrying about compliance or currency exchange complexity.
Payment Links: Klasha also provides a seamless payment solution for Chinese merchants who do not own a website or mobile app. With the payment links, these merchants can accept payments from their African customers in their local currencies while receiving payouts in any currency they choose.
With a Klasha Business Account, they can create one-time or recurring links and share them with customers via email, WeChat, WhatsApp, Instagram, and other social media channels for payments. Customers only need to click the links and pay using preferred payment options like bank transfer, debit cards, USSD, etc.
Pay-outs: Trade between Africa and China is a two-way exchange. While African nations import goods from China, they also export their products to China, with significant exports of minerals and agricultural resources annually.
Chinese merchants can conveniently send funds to their African business counterparts in African currencies using Klasha's Pay-out APIs. This service streamlines financial transactions and facilitates economic cooperation between the two regions.
Embedded payments: Klasha empowers Chinese payment service providers to establish their PSPs (Payment Service Providers) using its robust payment infrastructure. This allows them to accept African customer payments in their local African currencies seamlessly. In this setup, Klasha takes care of the backend processing for collections, ensuring a smooth payment experience, while the service providers have the flexibility to receive payouts in stable coins or any hard currency of their preference.
With Klasha's embedded payment feature, payment service providers can enjoy a transparent fee structure without hidden charges. They benefit from a straightforward pricing model with a single rate per payment method and currency, providing clarity and predictability in their payment processing costs.
Klasha's transformative role in simplifying China-Africa trade cannot be overstated. By providing efficient, secure, and cost-effective financial solutions, Klasha has become an invaluable partner for businesses looking to navigate the complexities of cross-border trade between China and Africa.
As trade relations continue to grow, Klasha is poised to play an even more significant role in shaping the future of commerce between these two regions.