My name is Chen Lei, and I’ve worked as the CFO for a Chinese company in South Africa for a full decade. From Johannesburg’s Sandton business district to Shanghai’s Lujiazui, I’ve handled at least thousands of cross-border remittances. During these ten years, I’ve encountered more pitfalls and shed more tears than South Africa’s rainy seasons—today, I’m sharing these “bitter experiences” in the hope that fellow businesspeople doing business in South Africa can avoid missteps.

My first misstep was in 2018, when I took over the finance department for a Chinese-owned building materials company. We were remitting 300,000 rand to a domestic supplier for tile purchases through a traditional bank (FNB Bank of South Africa). When I asked my assistant to fill out the remittance form, they abbreviated the branch name “Johannesburg” to “Joburg.” Because of this abbreviation, the funds, once they reached the intermediary bank (HSBC Hong Kong), were deemed to have “incomplete branch information” and were subsequently held up. I called FNB and HSBC every day, but FNB said, “We’ve already sent the information,” and HSBC said, “We haven’t received the complete information and can’t process it.” It was a constant back-and-forth. At the time, our domestic supplier was pressing hard, saying, “If you don’t pay, we’ll stop the order.” Our construction site was waiting for the tile production to begin, and the daily lost wages were 20,000 RMB. Finally, I had no choice but to ask a friend in Hong Kong to submit proof at an HSBC branch. It took 15 days for the funds to arrive in my domestic account. During those 15 days, I even turned a few hairs gray, and it was also the first time I realized that when it comes to cross-border payments in South Africa, “details” can mean the difference between life and death. From then on, I became obsessed with the accuracy of my bank information. I had to write the full branch name, such as “First National Bank Johannesburg Sandton Branch,” and never use abbreviations. I had to double-check my branch code three times, as branch codes in South Africa differ by only one or two digits; a single mistake could result in the transfer going to another branch. I was even more cautious with SWIFT codes. For example, FNB’s SWIFT code is “FIRNZAJJ,” and the last two “Js” couldn’t be missing; missing one would result in a different bank’s code. Later, using the Mustang system solved this problem. The system includes a “South African Bank Information Database,” and automatically matches branch codes and SWIFT codes when you enter a bank name. It also verifies the information for completeness. If you omit the branch name, a pop-up window will remind you to “Please complete the branch name to avoid being held up by an intermediate bank.” I never encountered any errors again.

The second major setback came in 2020, during the height of the pandemic, when the rand plummeted. At the time, we had to exchange 500,000 rand back to China every month to pay our employees. In March 2020, the rand fell from 0.42 to 0.35 against the Chinese Yuan, a 16% depreciation in just one month. This meant that the same 500,000 rand that could be exchanged for 210,000 RMB at the beginning of March would only be worth 175,000 RMB by the end of the month, a decrease of 35,000 RMB. To make matters worse, traditional bank transactions require advance reservations. For example, if you make an appointment today, it will take at least three days for the exchange rate to be settled, and during that time, the exchange rate could fall again. During that time, I was glued to my computer at 8 a.m. every day to check the exchange rate. If I saw even the slightest increase, I would rush to schedule a transaction. Sometimes I had to make two or three appointments a day, so busy I barely had time to eat. Later, integrating Mustang’s “Real-Time Exchange Settlement” feature alleviated this anxiety. The system displays the current exchange rate in real time. Clicking “Convert” means the funds are deposited within an hour, no appointment required. Furthermore, you can set an “exchange rate lock.” For example, if I decide 0.37 is a suitable exchange rate, I’ll set it to “automatically convert when the exchange rate reaches 0.37.” The system monitors this 24/7 and automatically initiates the conversion when the threshold is reached, eliminating my need to monitor it. In Q2 2020, using this feature, we exchanged 120,000 RMB more than before, which just covered our payroll shortfall.

Another pain point is compliance reporting, particularly LCA filings. In 2022, we have a profit of 2 million rand to repatriate to China, which requires us to submit an LCA application. Our initial submission was rejected by the South African Revenue Service (SARS) due to “inadequate explanation of the profit calculation.” SARS requested additional financial statements, profit distribution resolutions, and audit reports from the past three years. I asked the finance team to compile these documents, which took a full week, including overtime work, to complete. The second submission was rejected because the audit report lacked an English translation. That’s when I realized how stringent the LCA submission requirements were. Even a small detail missing would result in a rejection. Later, Mustang offered us an “LCA Submission Assistance Service.” Their dedicated compliance team reviewed our documents, including instructions on how to write a profit calculation statement to comply with SARS requirements and what the English translation of the audit report should include. They also provided templates, and we only needed to fill in the key information. Using this service, our subsequent LCA submissions were approved on the first try, reducing the processing time from two weeks to three days. Over the past decade, I’ve summarized the “three essentials” for cross-border payments in South Africa: First, compliance. Partners must hold both PASA and FSP licenses; otherwise, the security of funds is at risk. Second, real-time tracking. For each remittance, you need to be able to see the current stage, for example, “Submitted to bank → Reached intermediary bank → Deposited”—giving you peace of mind. Third, local customer service. If you encounter any issues, you can find someone to resolve them, preferably one who speaks Chinese, for effortless communication. Our company currently uses Mustang, which meets all three requirements: they hold both PASA and FSP licenses, provide real-time visibility into remittance progress, and offer a local Chinese-speaking customer service team. Even a call at 10 p.m. is always available.

Finally, a reminder for those new to South Africa: There are no shortcuts to cross-border payments in South Africa, but there are ingenuity options. Choosing the right partner, using the right tools, and paying attention to every detail can help you avoid pitfalls and frustrations, ensuring a smoother flow of funds. After all, it is not easy for Chinese companies like us to work hard in South Africa. Every penny must be spent wisely and every payment must be received safely.