When it comes to banking and finance, many businesses struggle with making international payments. Going to the bank to line up and fill out wire transfer forms is time consuming enough, but unforced errors (that happen frequently) can result in further delays.
To help ensure that your international payments are executed in the most efficient and stress-free way possible, we’ve compiled a list of the most common things you should look out for.
Double Check the Details!
Most international payments require a bank account/routing number, a full name, and the bank address of both sender and receiver. The software system that facilitates wire transfers (SWIFT) also requires the specific code of the receiving bank.
Sometimes, it can be difficult to gather all of this information. Especially since each country implements its own regulations and technical frameworks that can complicate the process even further.
Once you’ve gathered all the details, check them, and check them again. Incorrect info can lead to a delayed payment – meaning delayed shipping, upset suppliers and a damaged reputation.
Check out our blog: What are IBAN Codes?
Consider ALL Fees
When you send a wire payment through a bank, remember that there are several types of fees you (and your recipient) can be subjected to.
Many banks charge a flat service fee per transfer. This amount often increases when you send larger transfers. Some banks charge their fee as a percentage that is deducted from the amount being sent. Some banks may even charge both of these fees!
When sending a payment overseas, there’s a high chance you’ll have to deal with currency conversion. This is where you’ll be subjected to what’s known as a foreign exchange margin. When banks give you a quote for a live international exchange rate, they manipulate the margin in their favour to make further profit on your transfer.
All these fees can add up, and can result in your recipient getting less money than they’re owed. This is especially true if their bank charges an inward wire receiving fee (which they probably do). Underpaying is never ideal – especially if you’re trying to nurture and develop a new business relationship.
Consider all fees, and then double check the amount being received before you send your payment.
Don’t Forget About Holidays
If a bank is closed on a public holiday, then that’s one less business day for your payment to be processed.
You might be on top of the holidays celebrated/observed in your country – but likely not those in your recipient’s country. Do them a favour and plan your payment around bank holidays, so you can avoid delays – especially if you know they need payment by a certain date.
Check out our blog: 2020’s Public Holidays in REMITR’s Global Network
Look at the Alternatives
If you’ve always used your bank, you may be hesitant to veer away from the norm. But, it could be (and probably is) in your best interests to look into alternatives for making international payments. And there are LOTS of them out there, as technology – particularly PayTech and Fintech – continues to improve.
When comparing providers, be sure to look at exchange rates. Even the most minuscule difference in the percentages charged can add up to big savings for you. This is especially true if you’re sending large payments. It’s also worth noting that services that offer a flat- fee rate, as opposed to a fluid percentage, typically save you more money. But that’s not to say that their foreign exchange margin will not be hiked up more to compensate.
A common oversight many businesses make when sending payments to their overseas partners is to not look into delivery times. Some payment companies take a day, and others can take multiple days. A small bank can sometimes take weeks to process your payments. If you need to make a fast, cross-border payment, using a non-bank or online provider is a much more efficient option.
Using REMITR allows your business to send payments for as little as $5, in one business day, to over 150 countries worldwide. Our platform allows you to make effortless, on-time payments – wherever you do business.