The challenge

Kuaishou has experienced exponential growth to become a global leading player. Its Kwai app is hugely popular in overseas emerging markets – particularly in Brazil where Kwai is the most downloaded app. Even as Kuaishou experienced huge success in Brazil, it was facing local challenges running its critical cash incentive programme that makes millions of small payments a day from its overseas treasury hub to its end-users as a reward for their video contributions.

Brazil has very stringent FX regulations where transactions occurring domestically are required to be made in local currency, which means all payments in different currencies entering the country will require conversion. Overseas companies like Kuaishou still have some pain points, including:

• Lack of digitisation and transparency.
• High FX and transaction costs.
• Counterparty risks.
• Trapped cash.

The solution

The customised solution implemented in collaboration with J.P. Morgan allows the instantaneous, end-to-end movement of cross-border funds from Kuaishou to its users, leveraging the payment services of FitBank – a Brazilian fintech in which J.P. Morgan acquired a minority stake in 2020.

Kuaishou will regularly fund to FitBank. When payments are due, Kuaishou will leverage API, providing the payment details to FitBank, after which FitBank will disburse the funds directly to the end-users on the same day, leveraging FitBank’s connectivity to Brazil’s instant, 24/7 real-time payments system called Pix. The FX conversion from USD to BRL will take place a day later via J.P. Morgan.

Best practice and innovation

The solution is a first-to-market, cross-border payment innovation that not only achieves end-to-end digitisation and full visibility of both payments and FX conversions, but also solves the unique regulatory challenges of operating in Brazil whereby all overseas payments or remittances going into the country require a FX conversion into local currency.

Key benefits

• End-to-end digitisation and transparency.
• Implementation was completed within just three months.
• Significant savings in annual FX costs and in payment costs.
• Expected to free up working capital annually.
• Hundreds of hours of manpower savings annually.

“Providing a best in class experience to our end-users in Brazil is a top priority for us and this innovative digitisation solution in partnership with J.P. Morgan – leveraging the services of fintech Fitbank and API, has allowed payments coming from overseas to be made seamlessly to our end users – a notable feat in a market where FX is heavily regulated,” explains Shanshan Peng, Treasury Head at Kuaishou.