What’s the best way to receive international payments?
Receiving payments for goods or services can turn out to be more challenging than anticipated, even when the payer and payee are in the same country. And when transactions come from overseas, the difficulties faced by firms in receiving funds from clients can become harder still. Getting confirmation that the cheque is in the post isn’t necessarily cause for celebration if it takes weeks for the money to arrive and incurs unwelcome fees that dig into sales profits. To hit revenue targets, companies must determine the best way to receive international payments.
Firms need to be sure that remittance is sent securely, is timely (nobody likes waiting weeks to get paid), and incurs minimal fees. For company earnings to rise, firms need to focus on their operations and make sure that the wheels are turning efficiently across all departments. It’s one thing to optimize warehouse operations and streamline the supply chain for customers, but if money for those goods doesn’t arrive in company accounts on time, firms will put a burden on their future growth opportunities.
The good news is that we live in a digital age, which makes it a whole lot easier to answer the question – what’s the best way to receive international payments? Websites such as Monito make it straightforward for companies to compare international money transfers and make savings. In Monito’s case, the money transfer comparison website gives company payments teams the opportunity to examine over 200 options to receive international payments. And the payments information provided includes not just fees and exchange rate information, but also trust and credibility, service and quality, and customer satisfaction ratings.
Digital platforms simplify the process of scaling and future-proofing international payments. Tipalti enables users to send cross-border payments to 196 countries in 120 currencies via multiple payment methods, with FX solutions, multi-subsidiary, multi-language, and global tax capabilities, according to its website. And there’s no reason why payees need to wait until the invoicing stage to start thinking about the best way to receive international payments. Firms can start the remittance conversation much earlier in negotiations with clients – for example, by asking what international payments platforms they typically use.
Trust and credibility are important attributes to consider, particularly as the sums of money that firms are looking to receive from their overseas customers increases. Companies could suffer large financial losses if the money doesn’t turn up. Does the payments provider have a customer service team to help with queries, or do payers and payees have to make do with a chatbot to try and unravel any potential payment puzzles? But there will also be costs to consider. All operations have overheads, and that includes international payments providers. Payments providers will charge for their services, either directly through a fee of some description or by adding a markup to the foreign exchange rate. And rather than focus on the size of the fee, a better strategy could be to determine what benefits that additional cost brings in terms of receiving international payments.
Exiap, which is owned by Wise (formerly TransferWise), is another smart comparison engine primed with information on sending money internationally, which can help to establish the likely fees and current foreign exchange rates. The money transfer comparison website highlights the common ways of receiving money from overseas, including having funds deposited into a regular bank account – for example, through a wire transfer. Another option is to have the payment sent to a mobile wallet. But before we dig further into those options, it’s worth talking about foreign currency.
Ideally, the best way to receive international payments would be one that is free, fast, and predictable. We’ve already touched on where some of the costs originate for transferring money internationally, and woven into these are foreign exchange rates. Firms that regularly receive, as well as make, international payments, may wish to investigate the potential benefits of having a multicurrency account. For example, Wise gives businesses the option of setting up an account in any of 10 currencies. Having access to the local currency can help to manage money transfer costs. And there are other wins, too, such as being able to send and receive funds more quickly.
Lastly, there are integration considerations. Going down the payments platform route could simplify payments tracking as systems are often compatible with accounting software such as Xero, Quickbooks, FreeAgent, and other products. And on the payer’s side this could help with making multiple international payments – for example, rather than enter details payment by payment, the entire batch could be uploaded in the form of a spreadsheet. It returns our discussion on the best way to receive international payments, back to the topic of fees – what additional benefits do those charges bring? If they equate to long-term operational savings then the price is likely worth paying, but if they’re being kept high to support costly legacy systems, perhaps not.
22 February 2024
22 February 2024
21 February 2024