You don’t need to be a major corporation or importer/exporter to benefit from a money transfer service dedicated to marketplace sellers. If you’re selling something overseas, even as a side hustle, it’s worth exploring flexible international payment options if you want to keep more of your profits.
Send money internationally with OFX
Exclusive offer: Discounted exchange rates for your first and ongoing transactions. $0 transfer fee. OFX has no maximum limit transfers, with competitive exchange rates for 45+ currencies.
Exclusive offer: Discounted exchange rates for your first and ongoing transactions. $0 transfer fee.
A higher exchange rate applies to non-finder customers.
How do online seller accounts work for international payments?
The marketplace you’re selling on will probably give you a few in-built options to handle payments from international buyers. eBay, for example, uses PayPal. Amazon has its own Currency Converter for Sellers tool. You might also consider opening a bank account in the country you’re selling to and using a transfer to get your money back to Canada. However, all of these options tend to come with poor exchange rates and high fees, so you’ll keep less of the profits from your sales.
Many money transfer services have “online seller” accounts which can help you get your profits converted more fairly than a bank or PayPal transfer. These have 2 main features to them:
Local bank details
You have the option of getting local bank details for a range of markets, like the UK or US. This works exactly the same as having a normal bank account in these countries, without the hassle of opening a bank account in another country. The benefit of this is that when your buyer pays you, it’s treated as a domestic transfer.
This kind of account lets you hold multiple foreign currencies at the same time, without having to transfer them into Canadian dollars. You can make and receive foreign currency payments, depending on what currencies your service supports.
When it comes time to convert your money back into Canadian dollars, the service can help you with a fairer exchange rate and fee than what you’d see at a bank or PayPal. This will often end up giving you better value for money.
Compare marketplace seller accounts
Disclaimer: Exchange rates change often. Confirm the total cost with the provider before transferring money.
Should I just use PayPal?
Including only a PayPal “Buy Now” button depends on the needs of your business. PayPal doesn’t require an ongoing commitment, so it can make planning for growth easy. It also gives buyers the ability to buy multiple items, can issue refunds and track inventory. However, the fees can end up quite a lot higher for you than using a third-party transfer service.
What are the pros and cons of using a marketplace seller account?
Selling around the world. You can expand your audience to customers all around the globe.
Saving money. Fees for international transfers are twofold: the fee you see and the margin added to the exchange rate. Finding a better transfer service means more profits for your business.
Getting a better exchange rate. You can use options like a forward contract to lock in today’s exchange rate for a future transfer, which helps reduce risk.
Watch out for
Available currencies. Most online seller accounts support a limited number of currencies. For getting local bank details in another country, the list is even shorter.
Taxes. While you’ll gain access to the global market, you’ll need to keep on top of the tax rules and regulations in each country.
What fees should I expect?
The fees for online seller accounts vary from service to service. In general, there won’t be any fees for opening an account or keeping it open. Fees generally only apply when you move your money:
Flat or percentage fee. Most services are quite upfront about this fee. You’ll be able to see it before you make a transfer. Keep in mind that if no fees apply, you might be given a poorer exchange rate instead.
Exchange rate margin. The mid-market rate is the real exchange rate you can see on Google or the news. However, not many services will offer this. Instead, a margin is often added to the exchange rate, ranging from 0.4% to 10% depending on the currency and which service you’re using.
Receiving bank fee. Your bank may charge you fees to receive money, especially if it’s in the form of an international transfer. You can read more about these in our guides on the major banks, like TD and CIBC.
What can I use a marketplace seller account for?
Using a specialized account for e-commerce sellers can help you manage your business by:
Detecting and preventing fraud
Protecting your customers’ identities
Simplifying the payment process
Other international payment types that can help
Depending on your circumstances, there are several international payment options that can benefit you and your business, including:
One-off spot transfers. When you need to make a fast payment at the best available exchange rate, this is the option you would likely use.
Recurring transfers. Many transfer providers allow you to set up a recurring payment plan for extra convenience.
Forward contracts. You can protect yourself against exchange rate fluctuations by locking in an exchange rate now for a transfer that will be sent up to 2 or even 3 years into the future.
Limit orders. This option allows you to specify a target exchange rate for your international transfer. Your transfer company can then monitor foreign exchange markets, and when the desired rate becomes available, automatically transfer your funds.
What else should I know about selling online internationally?
Customs. Customs can be a pain for both sellers and buyers, but it’s there to ensure security and to abide by the laws in each country. Buyers are typically subjected to any fees associated with customs, a practice that is widely accepted.
Countries with transfer or shipping restrictions. International business is governed by the legalities of each country you do business with. Understand any legal ramifications that might come into play when selling products internationally.
What information you will need to get or provide. When establishing an online seller account you will provide your personal and business information. When a customer places an online order, they will need to use their full name and address to finalize the purchasing process.
Shipping and costs. Some online marketplaces offer shipping options to simplify the shipment process for sellers, two popular ones are the eBay Global Shipping Program and Fulfilled by Amazon.
Tools to make your life easier. Within the complex space of online selling, there are tools that can simplify the selling process for you and your customers. Take advantage of tools like Time Zone Converter, handy when trying to coordinate times to set your listings. Searching for tools that can aid your process can be time-consuming, but can make a big difference in the long run.
Fulfillment time. While fulfillment time can be an educated guess, especially when it comes to international shipping, manage customer expectations and be transparent about how long it takes for packages to be delivered.
Taxes and duties. Each country will have its own unique duties and taxes. Make sure to do your research thoroughly and even seek out professional tax advice. See the Government of Canada website for more details.
Whether you’re selling crocheted fruit or the latest tech gadgets, if you’re doing business across borders, getting the best foreign exchange deal will help you pocket more of your profits.
Money transfer services with dedicated marketplace seller accounts can help you reduce the impact of poor foreign exchange rates and conversion fees, but are only helpful if you’re selling to buyers in certain overseas markets. Make sure you weigh up the pros and cons of opening an online seller account before deciding whether it’s right for your needs.
Online seller accounts like OFX and Wise help educate you on how to identify fraud and have in-built systems to prevent and detect fraudulent activity. They can detect malware, fraudulent apps and phishing scams that are commonly targeted at online sellers. If you are worried that you’ve been the victim of fraud, you can call your service’s customer care department.
If you’re vigilant in preventing suspicious transactions by verifying your customer’s identity and information, you’re more likely to avoid scammers in the marketplace.
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