September 28, 2022/Comments Off on Making CNY Payments FAQ
Clients can make CNY payments by converting funds firstly to CNH and then to CNY at a 1:1 exchange rate.
What is the difference between CNY and CNH?
Renminbi is the name of the currency of the People’s Republic of China (RMB) while the currency unit is the Yuan. There are two types of Renminbi, each one covering a different trading market – CNY is used in the domestic economy while CNH is used for international trade. These two markets differ according to regulations and each market has its own exchange rate.
How are payments made?
China’s central banking system implemented its own international payment system in 2015 known as CIPS (Cross-Border Inter-Bank Payments System). CIPS provides clearing and settlement services for cross-border renminbi (RMB/Yuan) transactions.
CIPS became mandatory for cross border CNY on the 1st January, 2021. Our banking partner is a member of CIPS which means that CNH is converted to CNY at a 1:1 exchange rate within China, meaning that you never need to make a second FX conversion in China.
The payment process is outlined below:
1.We collect funds on behalf of your customer.
2.The funds are transferred from your customer’s sub-account into our master account.
3.The funds are converted into CNH by our banking partner.
4.The CNH is sent by SWIFT to our correspondent banking partner in China as part of the CIPS scheme.
6.The correspondent bank in China converts CNH to CNY at a 1:1 ratio and then deposits the funds in the beneficiary’s bank account.
Please note that the beneficiary of a CNY payment to China must be a company incorporated in mainland China. CNY payments to individuals are not permitted. It is possible, however, to send the onshore CNY to your bank or your partner’s bank and use them to distribute the funds locally to an individual’s bank account.
Is a Payment Purpose code required?
A valid payment purpose code is required for SWIFT CNY payments into China. A payment purpose code is not required for any other destination country.
Swift codes are handled by the SWIFT organization, and in particular from a division called “SWIFT Standards”. SWIFT stands for “Society for Worldwide Interbank Financial Telecommunication” and is a member-owned cooperative that is used by the financial world to conduct business operations. These codes were initially referred to as “swift codes” but were later standardized as BIC which stands for “Business Identifier Codes”. Both terms are used today and mean exactly the same thing: a BIC code is a unique alphanumeric identification code, consisting of combinations of letters and numbers, which is used to uniquely identify an institution's branch among the members of the swift network.
Why do I need this code?
The swift code is usually required by web banking applications for money transfers between two different banks (that are members of the swift network). We are not only asked to provide the beneficiary’s bank account number (or IBAN account number) that we want to send money to, but we must also provide the exact BIC code of the branch of the beneficiary’s bank. This site aims to simplify the process of finding this code. Note: please read our disclaimer at the bottom of this page BEFORE using any of the information found on this site.
The downside of international transfers with you bank:
Banks use SWIFT for international transfers, but it's not the most efficient or cost-effective solution. When you receive or send a wire transfer internationally with your bank, you might get a bad exchange rate, and pay high hidden fees as a result. We recommend using HUBFX, to get a great rate and low, transparent fee every time. Learn more.
A swift code consists of 11 or 8 characters, which is the standard format standardized by ISO (International Organization for Standardization). Here is an example code: CHASUS33XXX. This swift code is for the head offices of “JPMORGAN CHASE BANK, N.A.” in the U.S.A. and can be broken down to four parts:
CHAS - US - 33 - XXX
- First four characters: These 4 characters (“CHAS” in our example) identify the bank (“JP Morgan Chase”). This 4-letter code is used to identify this particular financial institution’s branches and divisions all over the world.
- Fifth and sixth characters: These 2 characters identify the country in which the bank is located. “US” in this example means “UNITED STATES”.
- Seventh and eighth characters: These 2 characters represent a location code (“33” in this example).
- Last three characters: These 3 characters form the branch code. “XXX” is used to identify the HEAD OFFICE or the institution, but this particular branch code is optional, and if omitted, the 8-character remaining code (“CHASUS33” in our example) is assumed to refer to the head office (primary office) of the institution.
Most requested SWIFT codes:
CHASUS33 CHASUS33XXX JPMORGAN CHASE BANK, N.A.
BOFAUS3N BOFAUS3NXXX BANK OF AMERICA, N.A.
MIDLGB22 MIDLGB22XXX HSBC BANK PLC
BARCGB22 BARCGB22XXX BARCLAYS BANK PLC
ABNANL2A ABNANL2AXXX ABN AMRO BANK N.V.
CITIUS33 CITIUS33XXX CITIBANK N.A.
WFBIUS6S WFBIUS6SXXX WELLS FARGO BANK, N.A.
NWBKGB2L NWBKGB2LXXX NATIONAL WESTMINSTER BANK PLC
COBADEFF COBADEFFXXX COMMERZBANK AG (BANKING COMMUNICATION SYSTEM)
BNPAFRPP BNPAFRPPXXX BNP PARIBAS SA (FORMELY BANQUE NATIONALE DE PARIS S.A.)
POALILIT POALILITXXX BANK HAPOALIM B.M.
LOYDGB2L LOYDGB2LXXX LLOYDS BANK PLC
NTSBDEB1 NTSBDEB1XXX N26 BANK GMBH (Used for NUMBER26 bank accounts)
DEUTDEDBPAL DEUTSCHE BANK PRIVAT-UND GESCHAEFTSKUNDEN AG (DEUTSCHE BANK VIRTUAL ACCOUNTING)
AXISINBB002 AXIS BANK LIMITED
