International business payments
You’ll find a variety of tools and services to make your business’s international payments miles easier, and less expensive, than you might think. Logistics don’t work out themselves though. You’ll still need to put in legwork to get your international business payments off the ground.
With your business model shaken out, take a look at how you’ll make and request payments across borders. Many options are at your disposal, each with their own benefits and drawbacks.
Money transfer providers are specialists that can get your funds from A to B at a low cost. And they’ll likely hit your account — or the account of your supplier, contractor or employee — sooner than other options.
Many specialists also offer forward contracts, limit orders and recurring transfers to save you time and money.
For a service that goes beyond directly sending and receiving payments, a business payment account with a money transfer provider may better suit your business’s needs.
One such provider is TransferWise. Its Borderless program allows you to set up local bank accounts in up to 15 countries so you can pay and get paid as though you were local.
When you’re looking to pay your employees, you can potentially get everything handled by an international payroll service. It processes the entirety of your payroll and stays up to date on regulation changes so you don’t have to.
A bank-to-bank wire transfer may be the most familiar and well-tread path, but it may not be what’s best for your business. International wire transfers often come with steep transfer fees and poor exchange rates.
An international transfer from Bank of America, for example, could cost up to $45, while some money transfer services don’t charge a fee at all.
Failing all other methods, you can mail a check. Doing so comes with quite a few drawbacks, including comparatively lackluster security and slow delivery times.
You may also run into low maximum amounts for international money orders if you decide to use USPS.
The right money transfer provider for your situation largely depends on several factors like price and features your business requires.
To figure out which provider is right for your business, consider:
PayPal is almost everywhere when it comes to online payments. So why not use it for international business payments?
There are a couple reasons, the biggest one being cost. PayPal charges an international money transfer fee, marks up its exchange rate and charges recipients a fee when they receive international business payments.
Whether you’re sending or receiving, you’ll likely be out more money than if you used a dedicated international money transfer service.
You’ll also miss out on certain features that could save you additional time and money, such as transfer options or an account manager to serve as your one point of contact.
How you set up to receive funds is going to depend on what type of service you go with. Banks are likely to give you the option to open the account and get started in-person, while a dedicated money transfer service will probably have less physical locations. You’ll likely also have the options of opening an account over the phone or online.
The process is a bit more involved for business accounts, so set aside at least a half hour in most cases to get through the entire application. Make sure you have your personal details, business information and any relevant finance information you may need.
Income from abroad is still taxable in the US. On top of the US IRS, be aware of any applicable international tax laws — especially if you have an international bank account. While there are many treaties around the world to avoid double taxation, you may still be subject to additional taxes.
Because tax law is so involved, you’ll likely want to seek out a certified advisor to make sure everything is above board. Some international business payment solutions like FlyWire can also help you manage your business taxes.
While there’s no one perfect product for making international business payments, knowing how to evaluate solutions and find the best one for your business goes a long way.
Compare international money transfer providers to get more details on the services they provide, how to better measure them against one another and what to do once you choose one.
Compare international business payment providers
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