Online sellers now have a cost-effective and secure way to save on foreign exchange costs with an international transfer provider.
Why we like: TransferWise
When you need to send money, benefit from competitive mid-market exchange rates and straightforward fees with TransferWise.
- Transparent fees and very low exchange rates.
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What’s in this guide?
What are international payments for online sellers?
International payments for online sellers allow you to transfer and repatriate the money you earn from selling products to overseas buyers. For example, if you’re selling books on an e-commerce website or marketplace and the buyer is in another country, you’ll need to find a way to transfer those funds back to the US, and to do it in a way that gives you the best value for your money.
Types of businesses that can benefit from money transfers for online sellers
You don’t need to be a major corporation or importer/exporter to benefit from money transfer services for online sellers. If you sell commerce overseas, even as a side hustle, you may want to explore these flexible international payment options.
- Selling hand-made or used goods on platforms like eBay, Etsy or Amazon
- Selling goods through your own website such as Squarespace
- Selling books or digital goods online such as through Amazon
How do international payments for online sellers work?
Setting up an effective international payment method allows online sellers to repatriate their earnings back to America. Although some e-commerce sites will send payments to the US, they typically charge high fees for doing so and often don’t provide you with access to the best available exchange rate.
The solution to this is to find a specialist money transfer company to help you manage your international payments. These companies, such as TransferWise, specialize in securely and cheaply moving funds around the world. Basically, they allow you to open up local receiving accounts in the countries you’re doing business in so that you can easily receive payments in the local currency via international marketplaces. You can essentially hold the funds in these accounts without transferring them to another currency until you’re ready, which cuts down on fees and potentially poor exchange rates.
Then, when you want to transfer your money to America, these companies offer lower fees than e-commerce sites to help you to repatriate your funds much more cost-effectively. They also provide transfer options such as limit orders and forward contracts, allowing you to get the exchange rate you want for your transfer, when you want to transfer the funds.Back to top
Should I just use PayPal?
The online payment space has experienced a great deal of growth in the past couple of years. With an extensive list of contenders, you can chose providers based on which best fits your current needs and customer demands. Each of these vendors, including PayPal, have unique strengths you can compare to determine which is the best fit for you, from rates and fees to customer service and technical support.
What might I use an online sellers payment service for?
- Accepting payments
- Detecting and preventing fraud
- Validating verifying customers
- Protecting your customer’s identity
- Documenting transactions
- Making the payment process simple and easy for your customers
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. When you need to make a fast payment at the best available exchange rate, this is the option you would choose.
- 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.
- 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.
How do I compare international payment methods?
You’ll 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 money transfer providers to see which one comes out on top.
- Transfer fees. Check the fee that will apply every time you repatriate funds to America and whether it is reasonable. Even fees that seem minimal can add up over time, so shop around for the best deal.
- Foreign account fees. Make sure you’re aware of any fees that apply to the foreign account you have to receive 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. Does the provider only offer one-off transfers, or can you save time by scheduling regular payments? Are limit orders and forward contracts also available to help you get a better exchange rate?
- Processing times. Time very often means 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 prompt 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.
- Customers. Having providers that are already in use by your customers can make for a hassle-free and speedy checkout process.
- PCI compliance. Ensuring PCI DSS standards are met by your provider makes for safe transactions for you and your customers.
- Integrations. A provider’s ability to easily integrate with applications and websites can impact user-experience and profitability.
10 things you should know about selling online internationally
- How easy it is to set up online site/marketplace to sell internationally. Entering the global market is more seamless than ever with online marketplaces such as eBay and Etsy. Once an online seller account is created, you can begin listing your products online.
- Fraud. While international selling presents a lot of e-commerce opportunities, it also exposes sellers to fraudsters. Due to lack of regulations, international selling can be especially targeted by scammers.
- Customs. Customs can be a pain for both sellers and buyers, but it is a necessity to ensure security and adherence to the laws applicable in each country. Buyers are typically subjected to any fees associated with customs, a practice that is widely accepted.
- Countries with transfer/shipping restrictions. International business is governed by the legalities of each country the products are sold to. It is important to ensure you are aware of any legal ramifications that might come into play when selling products internationally.
- What information you will need to get/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. Identifying the right markets for your business will heavily influence your success. Consider cultural, political and economic policies, as well as language and demand barriers when choosing the countries to ship your products to. 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. The UPS Worldship app can save you time processing shipments. 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, it is important to manage customer expectations and be transparent about how long it will take for packages to be delivered.
- Value-added tax (VAT). Value-added tax is the international equivalent of sales tax in the US. VAT is charged in more than 160 countries. For consumer goods, the VAT collected must be remitted to the government to be in compliance. This is something to consider when pricing your products.
- Value your customers. Even in e-commerce, the same rule of thumb applies — a happy customer is a return customer. Always ensure to provide good customer care and value your clientele.
What are the pros and cons of using an online sellers payment service?
- Worldwide sales. Finding a cost-effective international payment option allows you to connect with customers all around the globe.
- Save money. International money transfer providers can provide much better value for your business.
- Get the best exchange rate. You can use transfer options such as forward contracts or simply choose when to repatriate your funds to the United States in order to take advantage of the highest exchange rate.
- Fees apply. You’ll likely need to contend with transfer fees when repatriating funds to America.
- Technology fails. Technological failures can affect the overall process sporadically.
- Taxes. While international transfer providers bring easy access to global markets, with it also comes complex taxation based on geographical standards that can be challenging to grasp.
Things to avoid with international payments
- Transferring funds on a set schedule. One key problem that online sellers face is setting up an account to automatically transfer funds back to the United States on a set schedule — for example, every two weeks. While this can be convenient, it fails to take exchange rate fluctuations into account and often may not offer the best deal. Finding an account that allows you to pick and choose when to send money to America is recommended.
- Going with the default international payment option. Another thing to avoid is simply opting for the default international payment option offered by an international e-commerce 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 a better value.
Fraud in online marketplaces
While international online selling brings endless opportunities to reach customers worldwide, it can also create exposure to online fraud. Staying in the know of ongoing scams and new fraud rings is always helpful. The Association of Certified Fraud Examiners (ACFE) and similar organizations fuse and leverage knowledge about fraud networks, often involving federal and international authorities. With costly buyer fraud on the rise, detecting and defusing these situations can make a significant and profitable difference in your business. Below are three of the most common buyer scams and how to resolve them:
- Product not delivered. The buyer contacts the seller or marketplace stating the item was not delivered to receive a replacement or refund.
- Item not as described. Certain parts of the product are taken upon delivery and then claimed as missing to the marketplace.
- Return abuse. Buyer files a false claim and the marketplace refunds their money.
In all three of these common fraud cases, there are steps you can take to protect yourself. Track parcel delivery service, using applications designed to report inventory, track and review past sales. Know your rights in the marketplace to appeal any claims made by your customers. Recording serial numbers, along with taking pictures of the products with the shipping labels before sending them off to customers can protect sellers in dubious situations.
How can online seller accounts help me with fraud?
Online seller accounts like OFX and World First help educate you on how to identify fraud and also have their own fraud systems that help 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 have been the victim of fraud, you can call your service’s customer care department.
Be vigilant of any suspicious transactions, make sure to verify your customer’s identity and information, and stay abreast of the policies protecting you from fraudulent customers in the marketplace of your choice. This will allow you to follow steps to report fraudulent transactions and avoid any significant impact to your business by scammers.
An online sellers account enables you to securely conduct business across borders. Along with an easy and simple online payment process for your customers, you will also be able to take advantage of competitive exchange rates and much lower fees than a banking institution would charge. With an increasingly profitable online market space, international online sellers accounts are growing in popularity and might just be the right fit for your business.