If you are an online seller, you can now use an international money transfer provider to get better rates. They offer cost-effective and secure ways to save on foreign exchange costs.
As a Canadian business selling your goods and services all over the world, you will eventually need to transfer your profits back to Canada and into Canadian Dollars. You will need to find an affordable way to repatriate the funds you earn without paying huge fees and getting poor exchange rates. An International Online Seller account might be one way you can keep more of your profits when you make a money transfer each month.
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What are international payments for online sellers?
International payments for online sellers allow you to transfer and retrieve the money you earn from selling products or services to overseas buyers. For example, if you are selling books on an Australian eCommerce website or on a marketplace such as Amazon or ebay, the payments you receive for each book sold would be sent to an Australian account in Australian Dollars. You then need to find a way to transfer those funds back to Canada, and to do it in the way that gives you the best value for money.
How do international payments for online sellers work?
Setting up an effective international payment method allows online sellers to repatriate their earnings back to Canada. Although some eCommerce sites will send payments to Canada, they typically charge high fees for doing so and often do not provide access to the best available exchange rate.
The solution to this problem is to find a specialist money transfer company to help manage your international payments. These companies, like World First, specialize in moving funds across the world securely for a low cost. They allow you to set up an account in the country where you are doing business, which in turn allows you to receive payments from around the world via international marketplaces.
When you want to transfer your money to Canada, these companies offer lower fees than eCommerce sites. They also provide transfer options including limit orders and forward contracts, allowing you to get the exchange rate you want for your transfer and the option of choosing when you want to transfer your funds.
What are the types of international payments for online sellers?
Depending on your circumstances, there are several international payment options that may offer a range of advantages for you and your business. These options include:
- One-off spot transfers. This is a great option when you need to make a fast payment at the current best available exchange rate.
- 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 two or even three years into the future. Different companies will offer different time lengths for these types of contracts, some offering up to one year and others many 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 they can automatically transfer your funds.
How do I compare international payments for online sellers?
You will need to consider the following features when comparing transfer companies and the options they offer:
- Exchange rates. Getting the right exchange rate is critical to ensure that your international payments are cost-effective. Compare the rates offered by different money transfer providers to see which one offers the highest rate.
- Transfer fees. Check the fees that will apply every time you repatriate funds to Canada and decide whether or not it is reasonable. Even small fees can add up over time, so shop around for the best deal.
- Foreign account fees. Make sure you are aware of any fees that apply to the foreign account that receives payments. Are there any ongoing fees or transaction fees to contend with?
- Countries and currencies. In which countries can you open an account and in which currencies can you receive payments? The ability to access a wide range of international markets could be critical for online sales growth.
- Flexible options. Check if the provider offers one-off transfers and regular scheduled payments so that you have options. Furthermore, check the availability of limit orders and forward contracts to help you get a better exchange rate.
- Processing times. Time is money in business, so consider how long it will take each company to transfer the funds to your account from overseas.
- Customer support. If you ever have a question or a problem with a transaction, knowing that quick and friendly customer support is just a phone call away can provide peace of mind. See how you can get in touch with customer support and during which hours it is available.
What are the pros and cons of international payments for online sellers?
- Worldwide sales. Finding a cost-effective international payment option allows you to connect with customers around the world.
- Save money. International money transfer providers offer better value for money for your business.
- Get the best exchange rate. You can use transfer options like forward contracts or choose when to repatriate your funds to Canada in order to take advantage of the highest exchange rate.
- Fees apply. You will need to be willing to pay transfer fees when repatriating funds to Canada.
Things to avoid with international payments for online sellers
One key problem that online sellers face is setting up an account to automatically transfer funds back to Canada on a set schedule, for example every two weeks. While this can be convenient, this method fails to take exchange rate fluctuations into account and often may not offer the best rate, meaning you lose money. Finding an account that allows you to pick and choose when you can send money to Canada is a better option.
Another thing to avoid is to simply opt for the default international payment option offered by an international eCommerce site. This usually involves settling for a lower exchange rate and paying higher fees than is necessary, so compare your options and shop around for better value.