Traditional barriers to international payments, such as physical bank branches and reduced hours of operation, no longer need to be an issue. While everyone in the world is separated physically by distance, digitally we have never been so connected, and a digital world allows you to pay your customers, vendors and suppliers from any corner of the world with as little as a mobile device and internet connection.
According to a recent study by Juniper, the global payments space is primed for disruption because of changing technologies and amendments to the current banking regulations. It’s also poised to be worth $218 trillion by the end of 2022.
In this article, we’ll look at some of the current challenges of international payments, how digital global payment solutions can help, and more.
SHORTCUTS
- Why should I use an online solution for international payments?
- Which countries can I send an international payment to?
- Would international payment recipients be used to online vs. wire transfer?
- Challenges of international payments
- How automation improves the international payments process
-
How to choose an online solution for international payments
- Global payments automation is growing in use around the world
Why should I use an online solution for international payments?
Taking your international payment online can actually not only save you time but also saves you cost. Most banks charge additional fees for sending and receiving international payments. An international payment through a bank could increase your expense to anywhere from approximately $15 - $125 per transaction.
However, a payment solution like Plooto can handle your international payment with just a flat fee of $9.99. Also, Plooto offers a competitive exchange rate on your cross-border and international payment.
Which countries can I send an international payment to?
You can use Plooto to send international payment from either Canada (CAD) or the United States (USD) to over 30 different countries around the world, including the United Kingdom (GBP) and India (INR).
Would international payment recipients be used to online vs. wire transfer?
In the United Kingdom, as a result of payment speeds becoming more important for businesses, more businesses have adopted an online payment solution. As for India, the Finance Minister Nirmala Sitharaman has been working to strengthen the digital payment process. In fact, according to the “2020 McKinsey Global Payments Report,” India was one of the top countries with a 10% or higher growth rate of electronic transactions.
Challenges of international payments
High bank and transfer fees
Banks charge any number of fees for sending international payments. For example, there are fixed transfer fees depending on the bank and amount being sent. Fees are also dependent on the currency, where payment is originating from, speed to transfer and may include receiving fees. Bottom line: an international payment through a bank could increase your expenses to anywhere from approximately $15 - $125 per transaction.
Time-consuming international wire transfer forms
Forms for international wire transfers take time to fill out by nature due to the added complexity of sending money across borders and currencies, but if you’re filling them out manually, regularly and for multiple payments, that time investment can be cumbersome.
Also, the time that the funds themselves are in transit can be lengthy. While many banks and wire services are starting to get payments processed faster, they still don’t beat automated payment solutions to speedy transfer.
No tracking available for global payments
Since the process for sending an international transfer has historically been manual, the ability to track payments in real time hasn’t existed until now. With automated international payment solutions, you’ll typically have a status update for your transfers as they go through each phase of the payment process, and even be notified when your recipient receives the funds.
Lack of clarity around currency conversion rates
Before the advent of software that put the power of payment in a business owner’s hands, the process and language around sending international transfers and currency conversion were written for bankers.
This lack of transparency has sometimes created confusion around currency conversion rates and how to fully understand how much is being sent, received and paid in fees.
Payment automation software takes much of the guesswork out of setting up an international payment, including the automatic calculations of currency conversions across multiple countries at once.
Inability to enforce proper workflow when paying via a bank
Most other processes can be streamlined or automated in some way, but unless your payment solution includes the ability to send international transfers, you’ll be stuck fulfilling those manually through a bank.
This workflow, while sometimes necessary, doesn’t mix with the remaining payment workflows and can cause unnecessary friction, loss of time and potentially errors in reconciling.
Double data entry in accounting software
With a process that lives outside your typical payment workflow, that means you’re reconciling data in separate places, which is cumbersome, time consuming and prone to potential errors. Using a software solution that comes with native integrations to your existing tech stack – and most importantly, your accounting software – will reduce the amount of effort in reconciling your international payments.
Fraud
Business owners are not immune to payment fraud and scams. Working with vendors you’re unfamiliar with could potentially leave you out-of-pocket for your payment if fraud occurs, so it’s important to find a reputable solution for processing your international payments.
How automation improves the international payments process
Saves your business time and money
The front-end set up of international payments within an automation solution may take a little longer at first, but once it’s complete, it’s ready to make payments at scale. It also gives you far more control over the process. These solutions typically work on a flat-fee model and don’t include all the same fees – especially the hidden ones – as banks and wire services do. Plooto can handle your international payment with just a flat fee of $9.99. Also, Plooto offers a competitive exchange rate on your cross-border and international payment.
A single platform for domestic and international money transfers
Automation solutions are meant to be a one-stop shop for your payment needs. This means you can connect multiple payment methods and systems under one hub to make your transactions safe, fast and easy at home and abroad. You can use Plooto to send international payment from either Canada (CAD) or the United States (USD) to over 30 different countries around the world, including the United Kingdom (GBP) and India (INR).
Built to scale
By nature, software has the ability to add as many inputs as you’d like and apply the payment formulas to them en masse. This means your automation solution is a powerful tool that can scale with your business, no matter how many payments you are making. Depending on which solution you go with, it can also be economical as many work on a fixed-fee model, versus a per-transaction model.
Always in compliance
Sending payments across multiple countries, in varying currencies with different tax considerations can be challenging to keep straight. Automation software is updated in real time with new regulatory and compliance rules, allowing your payments to always be calculated with the right formulas in place.
%20(1).jpeg?width=750&height=546&name=Plooto%20takes%20the%20headache%20out%20of%20wat%20should%20be%20a%20simple%20process%20(1)%20(1).jpeg)
How to choose an online solution for international payments
- Calculate the number of transactions you process each month.
Some online payment solutions may be better suited to your business depending on the volume of international payments you are making. Tally up the total number of international payments you process, on average, each month.
- Add up the cost for each transaction
If you are paying fees per transaction, calculate the total amount of fees you are incurring for international payments, on average, each month. Most online payment solutions work on a flat fee per month model, allowing you to get a great deal matter the volume.
- Note which countries you’re sending payments to
Not all online payment solutions service payments to every country, so take note of which countries you are regularly processing payment to before purchasing a solution.
- Select an online payment solution
Your online payment platform should be able to process international payments seamlessly, saving you time and money. It should also integrate with your accounting system to make reconciliation easy.
- Implement the solution
The time it takes to onboard a new online payment solution will depend on the complexity of your current process, but typically there are self-serve guides or customer support teams available to help you.
Once implemented, you are ready to start processing international payments online.
Global payments automation is growing in use around the world
You might be concerned about your international payment recipient not being familiar with online international payments, but the reality is many businesses around the world are beginning to use digital payment software in some form or another.
In the United Kingdom, as a result of payment speeds becoming more important for businesses, more businesses have adopted an online payment solution. As for India, the Finance Minister Nirmala Sitharaman has been working to strengthen the digital payment process. In fact, according to the “2020 McKinsey Global Payments Report,” India was one of the top countries with a 10% or higher growth rate of electronic transactions.
Ready to get started?
Global payments automation could help you save time and money, allowing you to focus on what’s most important in your business. Keep all of your payments to customers, vendors and suppliers – no matter where they are in the world – organized and on time.
Integrating with an international payments software solution like Plooto will make all of this much easier, and you can get started for free with a 30-day trial.
CHAPTERS
00 Best Way to Send International Payments: Stress-Free and Low Cost
01 Things to Consider When Making International Payments
02 An International Payment Solution in the New Digital Norm
