Introduction

There are thousands of global payment rules for suppliers across the world. The best payment method typically depends on where the supplier is located and their expectations. 

A business needs multiple global payment methods because international vendors are looking for a flexible payment experience to best suit their needs. Each type has benefits and drawbacks that can impact both the satisfaction of suppliers and partners, as well as the workload of your finance and accounts payable teams.

Offering a range of payment methods gives global payees the ability to receive their money on time, in their local currency, and with the preferred method. Managing all of these payments manually can be a headache for any business owner, but finding the right payout platform makes the job easier.

Giving people a wealth of cross-border payment methods tells payees you are making their comfort and security a priority. Mass payment platforms such as Tipalti allow for thousands of payments to be made in minutes, while keeping the payer in full tax and regulatory compliance.  

What are the costs of cross-border payments?

Unless the costs involved in international transactions are thoroughly understood, it is possible to send a payment and be surprised that the amount received is much lower than expected. The following should be factored into any consideration of the price of a cross-border payment:

Exchange rates

The value of one currency in relation to another changes from day to day, so macroeconomic fluctuations can suddenly make an outgoing payment more expensive or an incoming payment less valuable than expected.

In addition to this, banks typically add several percentage points to the interbank FX rate at which banks lend money to each other. This acts as an additional hidden cost, although some fintech platforms offer payments at very minimal rates with no hidden costs.

Fees

International transaction fees are usually added to cross-border payments, and these can vary depending on the provider, the countries and currencies involved, and the type of payment. Wire transfers, for example, involve not only fees for both the initiation and receipt of a single transfer, but also fees for any intermediary banks that helped facilitate the transaction. The total cost of these fees is often not available upfront.

Taxes

There may be tax implications when sending large amounts of money across borders, depending on the country involved and the details of the transaction. A tax professional is best placed to advise whether this will impact a particular business’s payments.

Comparing cross-border payment providers

There are several types of financial institutions that can be used to send or collect money across borders, and the service they offer can vary in several ways. Each of these should be considered carefully to ensure that a business is getting the service that is best for their own operational success.

Banks

Businesses and individuals often have long-standing relationships with their banks, and some value the fact that it can still be possible to visit a bank branch in-person. These factors help explain why they are still often used for international transfers, even though fees are often higher and exchange rates less competitive than alternatives. Banks may also offer longer processing times for cross-border payments than more modern and streamlined alternatives. 

Money transfer services

Traditional money transfers services like Western Union also involve high fees, but they allow people who don’t have access to a bank account to send money overseas. Cash can be received in branches without the need for digital devices. This provider has a large network of branches all over the world and a high level of name recognition.

Fintechs

Thanks to advances in financial technology, a new generation of digital payment platforms has sprung up that allow money to be seamlessly transferred across borders. Transfi is an end-to-end payments and financial platform that offers a fast and cost-efficient way for companies to receive, hold and send money globally. Businesses can use Transfi to accept global Payments, make high-speed payouts to suppliers and partners across the world, and exchange currencies at the minimal rate.

What’s the best international payment gateway for my business?

As you can see, there are many great international payment gateway providers to choose from. When you’re weighing up your options, there are many factors to consider:

1. How much you’re prepared to spend
2. How soon you need to start taking payments
3. How soon you need to begin receiving funds
4. How much customer support you’re likely to require
5. What are your most important requirements

The question of which international payment gateways will integrate successfully with your company's other accounting solutions will also be a significant factor in your final decision. 

Ultimately, the option that suits your specific business requirements best will be your preferred choice. 

Transfi as a fintech solution looks into all these factors and combats them;

1. Low setting up cost and no hidden costs
2. Payments can begin as soon as an easy 3 step setup is done and the user can instantly start making transaction
3. Collections are also as easy as payments with simple and intuitive interface
4. There is 24/7 customer support available which lets one deal with any issue instantly
5. Security of payments and safeguarding user information and all other data is aptly conducted.

Transfi provides all these solutions with a simple, easy to use platform catering users of many currencies and payment methods to come together and access global payment in the blink of an eye through Transfi’s Bizpay.

Conclusion

Whether you’re making payments to global vendors or accepting payments from cross-border clients, you want to look for certain features in your platform. The best options are speedy, secure, and compatible with multiple currencies. Managing them all from a central platform makes it easier to access payment data and generate financial reports for accounting purposes. Additionally, they help save up costs in all use cases.

Frequently asked questions (FAQs)

1. How are multi currency payment platforms beneficial?

Offering a range of payment methods gives global payees the ability to receive their money on time, in their local currency, and with the preferred method. Managing all of these payments manually can be a headache for any business owner, but finding the right payout platform makes the job easier.

2. What are the costs related to cross border payments?

• Exchange rates
• Fees 
• Taxes 

3. What are the major cross border payment providers?

• Banks
• Money transfer services 
• Fintech solutions

4. How does Transfi help save money on cross-border payments?

Transfi provides low setting up cost, easy payments and collection solutions, 24/7 customer support and a simple, easy to use platform catering users of many currencies and payment methods to come together and access global payment in the blink of an eye. All the processes streamlined in one platform helps save time and money in cross border payments.

5. How to choose the best payment gateway for your business?

Look for the following while choosing the best payment gateway; 

• Low setting up cost 
• Easy payments
• Easy Collections 
• customer support 
• Multi currency approach 
• Security of payments and safeguarding user information and all other data