Online electronic payment provider PayPal has inked a partnership with Taiwanese trade promotion organisation Taiwantrade that will help the island's small and medium-size enterprises (SMEs) expand into cross-border trade.
Under the agreement, California-based PayPal will become the first online payment option in Taiwantrade's business-to-business e-marketplace when it goes live later this month. This will allow overseas buyers to purchase samples from local suppliers electronically; payments previously had to be made by either cheque, wire transfer or the supplier would simply eat the cost of shipping samples.
The firms estimate that the new service will result in a 14% rise in sales value at Taiwanese SMEs.
"Before, if a buyer was from outside Taiwan, there was no way they could make an order cost effectively," said Kerry Wong, general manager of PayPal Hong Kong and Taiwan. She explains that often the fees for sending a low-denomination cashiers cheque or bank transfer were more than the actual cost of purchasing the samples, deterring potential buyers or forcing suppliers to eat the cost of shipping samples with no guarantee of repeat business.
Wong continued: "We provide a more simplified [payment] experience for buyers and sellers on Taiwantrade."
The biggest benefit of PayPal's online payments system will be realised by the more than 90,000 domestic suppliers using Taiwantrade. Wong explained that the service operates on a pay-per-use basis where companies can set-up a free account and will only pay a fee when they make a sale.
In addition to shifting payments for samples onto electronic means, PayPal also offers online accounting, invoicing, reporting, order tracking and complaint resolution services. All services that can make life just a little bit easier for treasurers at Taiwan's SMEs.
PayPal and Taiwantrade hope the new payments capabilities will enable additional international trade. "Many Taiwantrade members have not previously expanded into cross-border trade," said Wong. "We look to expand cross-border e-commerce among merchants." She explained that in addition to adding its system to Taiwantrade, PayPal will also conduct training sessions in Taiwan to bring companies up to speed on the company's e-commerce offering.
In the first eleven months of 2009, total cross-border trade with Taiwan fell 27.8% year-on-year to $339.9 billion, according to the country's Bureau of Foreign Trade.
The partnership in Taiwan is one of PayPal's first in Asia. According to the company, it signed a memorandum of understanding with the SME Corporation Malaysia this January and partnered with Thailand's Department of Industrial Promotion and Department of Export Promotion in 2009. Wong said PayPal is also in talks with other quasi-government trade agencies throughout the region.
While merchants in Taiwan can expect more opportunities to use PayPal in the future, those in India saw all local bank transfers and personal payments into and out of the country suspended last month. Global director of communications at the provider said in a blog post that the company was responding to "enquiries from the Indian regulators, specifically questions on whether personal payments constitute remittances into India". Bank withdrawals for settlements for exports of goods and services resumed over the weekend, but personal withdrawals remained suspended.
PayPal is a subsidiary of global online auction website eBay.
