Top 5 International Payment Tips For Businesses

Top 5 International Payment Tips For Businesses
  • Opening Intro -

    As we are descending into an era where local is global – smaller to larger companies and businesses are venturing abroad, looking for sustainable profits.

    Going global allows businesses to access untapped foreign sources, markets, and different talents and safeguard from economic uncertainties of being in local markets.

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An estimate by Mckinsey states, by 2025, the global consumer circle is set to grow by 75%, which involves around 4.2 billion people. These 4.2 billion consumers will spend a whopping amount of $30 trillion annually. 

As international businesses continue to expand – the process of foreign exchange and international payments is becoming new business norms. Failing to understand global payments’ measures can have a significant impact on your success in the foreign markets.

Foreign exchange markets being erratic and volatile can possess some risks. However, international payment systems are rapidly evolving to remove unnecessary payment barriers and add ease to fair exchange.

Whether you are considering opening your business to international buyers or sellers, you have to consider viable options in receiving or sending payments. There should be comfort and convenience in payments exchange to have a profitable trade. On that note, here are the top five international payment tips for businesses.

Exploring various payment channels

Using the same online banking platforms to conduct your business seems convenient, but it is not the cheapest alternative in the market and is not as transparent as it seems. You might want to explore various channels that provide affordable exchange services and easy transfers. Like financial technology (fintech) companies, they use the most modern and user-friendly exchange methods.

Due to extraordinary competition and rapid innovation in financial tools, fintech is revolutionizing business methods. Doing transactions has become safer, easier, and more effective than ever.

The international payments services follow trends and competition, allowing smaller businesses to penetrate foreign markets, even if they have smaller profit margins.

There are also other popular money transfer options like – International wire transfers, International money orders, PayPal, electronic checks, and ACH payment systems.

Learning preferred payment methods of international customers

Your consumers will be the driving force of your business expansion, so it becomes imperative to know their preference for money transfer.

Different countries have their payment methods, and understanding these methods will be a plus to your profits.

For example:

  1. Germany has almost 50% of online retail purchasing on international websites. Most Germans prefer non-credit card payment methods such as Sofort, SEPA, Giropay, and PayPal, which are online bank transfers.
  2. In Russia, the most dominant payment methods are cash-on-delivery, online banking, and e-wallet services.
  3. The United States, the hub of international e-commerce markets, is dominated by various card systems.

A statistics of payment methods trend by shoppers worldwide shows, 42% prefer credit cards, 39% prefer PayPal (if available), 28% prefer debit cards, and 23% for cash-on-delivery. The most effective way for your business might be to offer multiple payment alternatives for your customers. These insights also provide you with an option to which countries and areas you can reach with your current payment receiving capability.

Opening multiple foreign currency accounts

If you are going global, you will frequently make and receive payments in foreign currencies. Due to this reason, it is worth setting up multiple accounts with your bank. It is indeed a tedious process but has a range of benefits that will be making or receiving payments.

  1. You can take full control over when and how you make payments exchange, rather than letting your bank convert and process for you.
  2. Currency conversions can be expensive; it is the best way not to convert any, and having multiple foreign currency accounts will hold onto currencies for future payments.
  3. The benefits of having multiple foreign currency accounts enable customers to pay in their local currency, which depends on your chosen payment gateway. Setting up a local currency listing has tons of benefits; it lets customers transact comfortably with your business.

International payments are also about taxes.

Paying taxes across all the countries is the obligation of international payments. Each country has a set of tax rules for each good you sell. VAT – value-added tax is the most common foreign tax, which is charged by many countries.

Before starting the business in these countries, it is essential to know that every country has its own set VAT rules. You will have to look upon registering and filing your returns on the official government websites and agencies.

Customs duty is a tax imposed on the goods that are transported across borders. Each article moving across the border will carry a duty amount related to it; you will have to check all duties for each object before selling.

other valuable tips from our business blog (new win):

Safety of your payments

As international payments processes become more accessible and more straightforward, your funds’ safety should be a priority. In your business transactions, you will be sending and receiving international payments on a large scale; you should know how to protect them. There are many cases of fraud, criminals stealing your personal information, and other suspicious activities.

Here are a few steps to protect your payments:

  1. Always make sure the device you are handling for transactions is entirely secure. Check operating systems, software, and applications you will be using for funds transfer. Get an antivirus program and never use public or shared devices to transfer payments.
  2. Verify payment details of the person or business you will be transacting.
  3. Always use strong passwords for all of your accounts.
  4. Only transfer funds to people you know and not strangers
  5. Choose trusted payment solutions only.

Conclusion

Always follow fees that are transparent and clear, beware of trap rates that payment solutions provide. Don’t shy away from getting expert advice; currency exchanges are a complicated process, and you necessarily don’t need to get involved with it.

International payments should be beneficial and business-boosting process and not otherwise. Any business operating on a global level should explore a wide range of benefits from foreign exchange and take their business to the next level.

Image Credit: international payment by unsplash

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Consumer Tips reference:

GUIDE: establishing good credit

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