Companies have found a way to speed up international payments

According to the source, there are already examples of the creation of factoring companies in friendly countries and this mechanism is actively gaining popularity. Ivan Tikhonenok, head of the banking group at the Amond & Smith law firm, and Anna Zabrotskaya, partner at the Nordic Star law firm, confirm the growing interest in factoring in the field of foreign economic activity (FEA).

What is factoring in simple words?

The factoring scheme is simple: an intermediary company helps the seller and the buyer, while the commission for the services can range from 4% to 6%. This mechanism is becoming increasingly popular as foreign banks limit their work with payment agents and factoring allows to minimize risks and make international payments legally.

Unlike a bank loan, factoring does not require collateral and its volumes grow along with sales. Companies are now using it as an alternative to traditional financial instruments, especially under the pressure of sanctions.

Experts expect further development of factoring, despite the presence of some difficulties with its use in international transactions: banks will continue to see intermediation, this type of activity is not authorized in all jurisdictions, etc.

• Russian-Chinese trade relations have been in place since July 2024. First, large Chinese banks began to divide the yuan into “clean” and “dirty”. The latter is associated with Russia and credit institutions do not want to work with it.
• The partners then switched to making payments through small regional banks in the country, but restrictions soon appeared on them as well.
• Later in August, suppliers from China refused to supply products directly to Russia and instead used shipments via third countries.