Having the ability to make international payments is essential to the functionality of modern life.
With the continuous increase in people working abroad, comes an increase in the number of money people send back to families and friends.
And there’s not just an increase in people working abroad, there’s an increase in companies doing business internationally. As a result, the ability to make overseas payments is crucial for a modern business.
Modern business related payments are spurred by the dominance of services delivered overseas. These services include digital freelance jobs, software development, contact centers, etc.
Many companies import goods to sell, or to help in the manufacturing process of a product. Having an easy way to pay overseas suppliers is crucial to make your importing process as seamless as possible.
It is simply not safe or good practice to send cash or cheques in the mail, so many people opt to use wire transfer. However, wire transfers have become outdated – they take far too long and cost way too much.
In order to avoid the hefty fees charged by banks, people are turning to money service businesses (MSBs) to send money internationally.
To send money online, you require a reliable and trusted MSB. One of the most popular options used in Canada is WorldRemit.
As of 2018, WorldRemit’s service enables senders in 50 countries to send money to over 140 countries across the world.
However, it may not be the best method to use for sending business payments. Here’s why.
If you’re making a business to business (B2B) payment using services that are primarily designed for sending personal remittances,you may find they are not able to serve your needs entirely.
Oftentimes, services designed for sending personal remittances are not able to send large value payments. These type of payments are pretty regular for business payments.
Some services adopt policies which allow you to make payments to individuals who are friends and family, but not to individuals who may be your employees or independent contractors. Sending payments to a large number of people who are seemingly unrelated to you can attract suspicion and anti money laundering probes.
As a result, you are forced to use the service in your personal name as an individual. However, the payments you are sending are most likely on behalf of your company which is a registered and incorporated entity.
Unless your company is a sole proprietor company, sending payments in your personal name on behalf of your company may endanger your reputation with the tax authorities. It may also attract penal provisions depending on the prevalent laws.
Payment services that are not fully compliant with local regulations run the risk of accounts being suspended. They may also be reported for investigation to local authorities like Canada Revenue Agency (CRA), or Internal Revenue Service – meaning you could receive a hefty fine, or worse!
With most personal remittance services, the maximum amount you can send depends on where you live and how you pay for the transfer.
If you are sending $1,000 or more, you will be asked to provide some additional documentation as well as the standard ID requirements.
This can include:
1) Government issued photo ID:
- Canadian passport
- Current Canadian Driving Licence
- Current Canadian residence permit
2) Proof of address:
To verify your address you may be asked for a bank statement, Notice of Assessment (NOA) or utility bill.
The document you provide must not be older than 6 months, and the address printed on this must match that on your money transfer account.
At 2:30pm on 12.12.2018, the CAD/USD exchange rate was CAD 1 = 0.75. This means CAD 1 would get you USD 0.75.
At the same time, the exchange rate offered by WorldRemit was CAD 1 = 0.73 – meaning CAD 1 would get you USD 0.73.
Almost all banks and financial institutions will markup the Foreign Exchange price so that they can profit.
While this is not unreasonable, many institutions markup much more than others.
However, some MSBs charge the live FX rate!
What Is The Best Way For Canadian Businesses To Pay Overseas Suppliers?
REMITR Business Payments solves all your international payment problems.
Our service allows companies to send money to over 150 countries worldwide at any time. Funds become available within 1 business day, and sometimes even instantly!
With REMITR, you get the best live Foreign Exchange rate – regardless of banking hours.
We also offer you guaranteed savings, charging a flat fee as low as $5 to most countries – no matter how much money you want to send!
The beneficiary receives all the money that you send; we don’t charge any sneaky receiver fees when you send to them in their local currency.
REMITR is a FINTRAC-registered service that employs state of the art technology to protect your payments and financial information.
So to avoid unnecessary trips to the bank, fees, unfair conversion rates and waiting around – get in touch with REMITR today.