Mobile payment and commerce technology provider Mozido has established a cross-border e-commerce payment connection between China and Russia, a project that resulted from its purchase of Beijing-based PayEase Corp. earlier this year.
PayEase, operating as a Mozido affiliate, offers TradeEase for merchants in both China and Russia as an offline-to-online payments platform that will enable Russian consumers to make e-commerce purchases from Chinese merchants, and vice versa. Mozido says TradeEase will be the first cross-border offline-to-online service between the two countries.
"It is a marketplace platform similar to Amazon or Taobao," said Ron Hynes, executive vice president and head of global markets at Mozido. "The consumer will see the price of the product in their local currency and will be billed in their local currency."
Mozido views Russia and China "as a strong and growing market" and has been working on the development of TradeEase for the past six months, Hynes added. "The potential for economic development within China and Russia has never been more evident."
TradeEase benefits from the local currency capability because other international marketplace e-commerce sites bill in U.S. dollars, euros or other non-local currency, Hynes said. "Other sites lose on foreign exchange when they have to convert the currency to settle," said Hynes, a former MasterCard executive who joined Mozido in January 2015 with the job of expanding global markets for the Austin, Texas-based white-label mobile and digital payments provider.
In addition, merchants can establish a physical location for consumers to purchase goods from the other country through the TradeEase platform.
Yandex Money, a Russian payment processing company with 170,000 cash acceptance points in the country, will operate as a key partner in allowing buyers to pay for purchases on the TradeEase platform through e-wallets, bank cards or bank accounts. Bank of China will provide currency conversions.
The Suifenhe Government, the governing body of the local border between Russia and China, will subsidize promotions for TradeEase in both countries.
"All new payments initiatives are about removing friction, and cross-border payments in non-U.S. dollars represent the most friction in the industry," said Thad Peterson, senior analyst with Boston-based Aite Group.
Anything Mozido can do to reduce friction between China and Russia is going to improve commerce on both sides, Peterson said.
"Mozido is a very smart player in the industry and seems to be making an awful lot of right moves," Peterson added. "They clearly have a good vision on where they want to go and certainly hire the right people."
PayEase has connections to 23 banks in China and is a member of China UnionPay. The company processes all debit and credit cards in China, including MasterCard, Visa, American Express and JCB cards.
Mozido expects more than 200 Chinese online shops to participate during the initial launch, which begins Sept. 14, and as many as 800 by the end of the year. More than 100,000 consumers in Russia are expected to be active on the platform during its first three months of operation with a goal of 1 million active users after a year.