Deutsche Bank has signed an agreement with the State Post Bureau of China, or China Post, to process electronic international money transfers in US dollars and euros. The deal sees China Post connected to Eurogiro, the global electronic payment network operated by post offices worldwide.
Up until now China Post's 150 million retail clients have been limited to transferring and receiving cash from overseas parties through a tie-up with Western Union which has been in operation for 18 months. But the new deal with Deutsche Bank will allow them to transfer money electronically from account to account.
Deutsche Bank is reluctant to estimate the number of transactions that will flow through the system each month, but says that China Post processes as many as 600,000 domestic payments each day. And the popularity of Western Union's cash transfer service, while starting from a low base, has been increasing by between 20% and 25% each month.
"Working with China Post offers us the opportunity to demonstrate our state-of-the-art solutions," says John Ball, head of sales for Deutsche Bank's global cash management services in Asia Pacific. He says the post office will start with US dollar transactions next month and follow on with euros later in the year. Other international currencies will be added over time.
The post offices that are owners and members of Eurogiro use the network to communicate and transfer money between post office accounts around the globe. As non-banks they are unable to access SWIFT. Detusche Bank is the only global bank belonging to the network and uses this relationship to offer members access to the SWIFT protocol.