No matter if you’re in charge of a small business or a large enterprise, opting for international expansion is an excellent way to boost growth. When you sell to customers outside of your area, you make your company open to a much bigger market which can improve your revenue significantly. Even though it’s evident that making use of global opportunities offers huge potential for the growth of your business, this international expansion isn’t always that simple.
Many businesses find it challenging to receive payments and send refunds to international customers. Still, you shouldn’t confine yourself to only one market since it can reduce your business chances. Here, you’ll find some of the best ways to improve your international business payment processing to help you boost your success.
Think about having a multi-currency account
In case you operate internationally and often receive or make payments in foreign currencies, it’s recommended to set up a multi-currency account, which is also called a foreign currency account. In other words, it’s a kind of account that offers you the possibility to send and receive funds in different currencies. By opening this account, you’ll avoid some of the exchange rates that frequently make international business payments so expensive as you won’t always need to convert the money you receive.
Keep in mind that these often just include major currencies, so you should check with your bank to find out which currencies are accepted. Don’t forget that while you’re keeping money in different currencies, the value of your funds can change considerably. Note that when a currency becomes less valuable, it turns into a loss in your multi-currency account.
Use online payment gateways
Certainly, one of the best ways of getting money from a foreign country is via online payment gateways like PayPal. But there are numerous other gateways that you may decide to use, including Google Pay, Shopify, and Stripe. These payment methods are more popular as consumers often like using them because of their simplicity.
Perhaps one of the biggest advantages of using these solutions for cross-border payments is that the fees are considerably decreased. In most cases, you’ll just have to pay a fee that’s a percentage of the general transaction cost together with a low transaction cost. Also, you won’t have to pay conversion fees or exchange rates. Moreover, it’s possible to integrate third-party services that provide the option of paying in various ways like debit and credit cards and occasionally even cryptocurrency.
Consider different providers of foreign exchange services
Although relying on the same online banking platform for every business transaction may be convenient, you’ll see it’s not always transparent and definitely not the cheapest option. While making international payments via an online banking platform, it’s common to be charged hidden fees of up to 4% of the amount. In addition to this, it’s also convenient to opt for a suitable trade finance option to avoid disturbing the cash flow and not be left in debt.
By opting for a trade finance company, you’ll be given the opportunity to pay your supplier on time and repay them at a later date with an economical interest fee. Furthermore, by dedicating a small amount of time to signing up for the services of an international payments specialist, your efforts will promptly pay off in monetary savings and advancements in your process.
Do bank transfers without the bank
Possibly one of the most usual solutions for receiving payments from abroad is to do a money transfer. It’s highly likely that you’re already accustomed to online payments through bank transfers, but it’s also important to be familiar with third-party companies like Western Union or World First that offer these transfers as well. International companies like these are commonly referred to as “non-banks” and they provide you with a fast way to make transfers internationally.
As opposed to traditional banks, they offer better exchange rates and much lower fees, together with 24-hour customer services. However, they can at times be limiting when it comes to the payment solutions they accept while they also might not accept credit cards.
Take into account various currency products
You should be aware of a variety of currency products that are available to businesses via foreign exchange providers. Although the majority of them will be necessary only if you’re in the top position among multinationals, there are a few that are useful, which you should keep in mind. For instance, currency forwards provide you with the possibility to lock in an exchange rate in case you have scheduled outgoing payments or are expecting funds. In this way, you’ll increase accounting certainty and lower your exposure to exchange rate unpredictability.
For instance, you might discover that the rate is 1.15 to the pound when issuing an invoice in euros, and be paid while the rate is 1.40, resulting in a loss bigger than 20%. In cases when you have to handle an invoice payment at the last minute, it’s useful to always take into account providers that offer same-day payments. The Buy Now Pay Later Market is booming at this time. Many businesses are taking the opportunity to boost sales through this technique.
Don’t forget about security
While making payments, you need to pay close attention to the fact that there’s a body that regulates the field and can cover you in case of potential losses. This is even more important when making or receiving payments from across the globe, which is why you always need to look into any online transfer methods or services you’re considering. You should ensure they’re registered or authorized by a trusted body prior to relying on them for your business transactions.
Global payments and currency exchange should be an aid in encouraging growth for your business, not something which inhibits it. After reading this article, you’ve become aware of some of the easiest and most efficient ways to boost your international business paying process. Keep yourself as prepared as possible to suit your customers’ paying needs and get yourself ready for some smooth cross-border transactions.