Your choice of payment provider is likely to have the single biggest impact on the amount you have to pay in international payment fees. All international businesses will know this is a big issue. On top of that, whether importing stock or exporting products, trading internationally means you’re constantly exposed to the fluctuations of the currency markets. The product you source one day might be more expensive the next. Worrying about the international business payment terms you have is just a further complication to the matter, but if you’re looking to compare business international payment services you’ve come to the right place. In this article we’ll compare business international payment solutions by looking at the fees involved, the various payment methods available and the overall solution on offer.
First, let’s take a look at and compare international business payment methods. This is a good one to start at because truth be told most money transfer companies offer very similar payment methods – albeit a very comprehensive offering. Specialist money transfer companies have done a brilliant job of bringing products, traditionally only available to large corporates via banks, to SMEs and the wider import/export market.
There are three common products that money transfer companies offer business clients as standard – spot FX, forward contracts and limit orders. If you’re an SME using your bank then chances are you can only conduct spot FX i.e. agreeing to the live exchange rate to make a payment right now. Forward contracts allow you to agree on today’s exchange rate for any payment you wish to make in the future and limit orders allow you to set a target rate which will automatically trigger once the currency pair moves to that rate.
Then we can consider how we compare international business payment methods of another sort – how the money transfer company accepts and makes payments. For example an online transfer, card payment or direct debit for regular transfers.
A Publicly Traded Money Transfer Company from Australia
It should first be noted that private clients don’t have to worry about international payment fees with any of the money transfer companies we recommend on SendMoneyAustralia.com. As private clients make significantly fewer payments than a business the money transfer firms are happy to absorb the payment fee and still make money on the FX spread. That’s not to say business clients have to pay through the roof though, especially when you compare their payment fees to Australian banks.
An international payment with ANZ conducted over the phone will set you back $32, whilst an online transfer would see you charged $18. A transfer with NAB will set you back $20 if it’s AUD you’re converting and $10 if you’re converting a different currency.
Money transfer providers make thousands of payments a day on behalf of their clients and as a result, enjoy ‘wholesale’ banking fees from their banking partners. As money transfer firms save in this area they will generally pass this cost-saving onto their business and corporate customers. Just like the scenario of the money transfer firm and the bank, the higher your payment volumes the more you’ll be able to negotiate the fee down.
Let’s consider the overall proposition and payment solutions that these money transfer firms can offer. It should go without saying that an easy and quick online platform is for certain, but it’s also important to consider the value added by account managers, telephone dealing and face-to-face meetings to discuss your currency strategy. This is something all of the money transfer firms we’ve listed incorporate into their service. These are well-established providers, who have been built around offering better customer service than the banks.
WorldFirst has a very intuitive online platform that allows users to both place FX deals and make cross-border payments separately. If you find yourself paying the same beneficiary frequently, you can set up quick payments and easily access these from the dashboard and complete an international payment in just a few clicks. On top of that, mass payments can be made via the online platform with ease – you can either complete all beneficiary details manually or upload a batch file/import your data that details all of the payments you’d like to make at once.This can be particularly beneficial for payroll.
WorldFirst’s World Account is a real game-changer for SME’s who struggle to meet some of the complex banking regulations to open bank accounts overseas. In just a few clicks you can open a new account in up to 10 different currencies. Importantly, all 10 accounts are held in the country that the currency represents, meaning you can do business like a local and make and receive same currency payments within the same country. Other providers who offer a similar service generally operate all of the currency accounts out of London so making/receiving local payments in the US and Australia could be difficult for example. However, that’s not the case with WorldFirst and as it stands, currency accounts can be opened for all of the major ecommerce corridors around the world, including GBP, EUR, USD, AUD & NZD. Just like any bank account you can build your balances and both make and receive payments.
OFX, and a number of other money transfer firms, allow business customers to sync their FX accounts with Xero or Quickbooks. An API integration means reporting is automated and you don’t have to worry about manually and cumbersomely uploading all of your transaction details when the financial year end creeps up on you.
By now, you may well realise that when we compare business international payment costs, the single most important step you can make is to consider using money transfer firms as well as banks. In fact, if you compare business international payment fees from money transfer firms vs banks, the money transfer firms generally win hands down. What’s more, if we compare business international payment solutions, then specialist money transfer firms generally have a far more well-rounded offering, particularly for SME businesses. There isn’t a huge amount to choose between the leading money transfer firms, but do your research on each one and find the one that’s a great fit for your business.