What exactly are cross-border payments? Sometimes referred to as international payments, cross-border payments occur when a business or a customer makes a payment to someone in a different country.
Whether you are buying products or services abroad or selling them, you’ll want to have the best payment experience as you wouldn’t want to lose time and money to expensive fees and delays. International payments are a broad class with quite a few different types. So, we have compiled here for you a quick guide to the cross-border payments industry to ensure you identify the best fit for your business.
Simplify Your Cross-Border Transactions with Gate2way
Gate2way.com is intended for companies that own online businesses (websites), which require payment processing. It’s a business-to-business type of product, meant to expand and enrich the experience of a website, as well as its functionality. With over 432 international payment channels as partners, you can get your payments securely from any part of the world! Payment options include bank transfers, e-wallets, cash payments, vouchers, etc.
Cross Border Payments – 5 Things You Should Know About Finding the Best Fit for Your Business
Wire transfers by bank tend to be slow and expensive. Although you have the luxury of online banking, banks usually charge a fee, which really adds up if you make international payments on a regular basis. You could encounter cash flow delays as well, as cross-border money transfers could take as much as 5 days.
Credit or Debit Cards
Conducting international payments with either a credit or debit card will often come with a fee. Fees incurred on credit cards are often higher than those on bank transfers or debit cards. However, there’s the added perk – you can query a faulty transaction and charge it to the seller.
Payment Processing Services
Payment service providers (PSPs) play a crucial role in the payment environment, and help you receive cross-border payments using debit or credit cards and Direct Debit. And this is where Gate2way comes in. They manage the end-to-end payment process and are one option you can use to accept as many types of payment as possible. This way, you can expand your customer base. They also curate a plan according to your needs and offer you the best possible rates for the transactions.
Receiving Cross-border Payments
If you’re into selling products and/or services at the international level, then it’s important that your customers have a fast, reliable, and secure way to make payments. For a healthy payment experience, you’ll should go for a cross-border payment process flow that is fast and reliable, and blends in with your business’ needs.
If you deal majorly in B2B cross-border payments, then you’ll be making your business customers happy by giving them the option of making payments directly to your business bank account. While they can always do this from their banks, the faster option remains a foreign exchange platform.
To receive a cross-border payments wire transfer like this, you’ll need to provide the following when invoicing customers:
- Either your name or your company’s name and address
- Your bank’s name and address
- International Bank Account Number (IBAN) or account number
- Swift code or Bank Identifier Code (BIC)
Banks can place an incoming fee charge on money from an overseas bank account, so you would be better off factoring in this cost when choosing how you’d like to be paid.
If yours is an eCommerce business, then a crucial part of offering good international customer service would be in getting your cross-border payments right. It’s also essential that you go through the cross-border payment regulations for the countries you do business in to ensure that you are working in line with all regulatory compliance that surround personal data and customer security.
Making Cross-border Payments
When making cross-border payments we advise that you evaluate the cost of any fees against the foreign exchange rate to ascertain if paying by bank transfer or card (or a foreign exchange service) is your most thrifty option. Often, a provider will look attractive because they offer no-charge payments. However, they then offer a poor exchange rate for the cross-border payment quantity you want. For an expensive buy, it’s important that you check real-time exchange rates with a few providers to be sure you won’t be losing money with the transaction.
It’s always worthwhile finding out the cost of goods in the supplier’s home currency so as to determine whether there could be a discount.
As the world becomes more of a global village, cross-border payments will definitely increase. It is therefore important that you are able to identify which payment pattern suits you best so you can minimize losses and maximize profits on all your transactions. We hope this article has proven helpful. You can always drop in your contributions and questions in the comments section below.