Wholesale banking? Transaction banking? How they are related to cross-border payments


Wholesale banking

What is wholesale banking?

What are services provided by wholesale banking?

  1. Lending: provide loans or advances of high value to large scale business entities
  2. Deposits: receive deposits from big companies and provides high interest
  3. Credit creation: when dealing with the government, wholesale banking can increase flow of funds by borrowing from the government by selling loans on its book
  1. Underwriting: raises capital for projects of large business by issuing debt to investors
  2. M&A: wholesale banking participate in M&A through operations like currency conversion for international M&A
  3. Fund management: manage funds deposited by clients
  1. Liquidity management across different countries
  2. International trade finance
  3. International Payments, also known as wholesale payments

Transaction Banking

What is transaction banking?

  1. Trade finance
  2. Cash management
  3. Escrow services

Trade finance:

Cash management:

  • Working capital: Mostly categorized under cash management. Solution designed to address business needs’ to manage their liquidity and circulating capital in the short term.
  • Payment: include domestic and cross-border payments

Securities Services

Wholesale banking and transaction banking in cross-border payments

  1. There is international payment demand in the SME sector as cross-border commerce is not exclusively for the largest companies. For example, most of the Amazon sellers get their supply from China. This has created creates opportunities for fintech companies like Payoneer and Airwallex, but we are just started in the revolution of cross-border B2B payments for SMEs.
  2. On the larger scale side, I can see why solution like Visa B2B connect will target the wholesale payments or transaction banking area of their financial institution clients.




passion for #fintech #payments #RTP real time payment #Banking as a Service #digital strategy #blockchain

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Ming-Chieh Lee

Ming-Chieh Lee

passion for #fintech #payments #RTP real time payment #Banking as a Service #digital strategy #blockchain

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