International Payments for Business: What to Look For?
Have you ever worried about your international payments for business and how to save money on them? Then keep reading.
Any business that operates in multiple markets is exposed to international payments and foreign currencies. And any such business owner can tell you that sending money abroad or exchanging foreign currency is an expensive service.
Here is a list of tips that will save you money when making international business payments and key factors you should account for when opening an international business account:
1. A monthly account fee is a fee to tie you up to the provider of your choice and cover the account management costs. Usually, the monthly fee depends on the projected volumes of international payments for business. Any reputable PSP these days will provide you with an account manager that will be your point of contact in regards to your international business account issues or banking products.
You should evaluate how well and informatively the salesperson answered your questions or presented the international payments platform, because that is probably the same person you will have as an account manager. Lastly, it is quite hard to waive a monthly account management fee but simple to negotiate it lower. We have waived monthly fees or, in the worst cases, negotiated the monthly fees to a minimum for our clients.
2. Foreign Exchange Fees: it is strongly recommended to seek a fixed margin on the foreign exchange spread. This margin should be calculated into the exchange rate and always be transparently visible on the international payments platform or the mobile app.
In terms of the foreign exchange spread itself, it depends on the currencies used and the volumes exchanged per month or year. The higher the volume and more liquid the currency, the smaller the spread. Knowing the foreign exchange market from inside, we can confidently say that negotiating the spread is of key importance. We have helped many clients save thousands just by negotiating the FX spread to a minimum.
Another important element is the variety of currencies available with the selected banking provider. Anything over 30 different currencies is a sign of a good international payments provider for businesses. Don’t forget to consider the settlement times of foreign exchange too. Anything over T+2 is not efficient enough. Generally, same-day or next-day settlement is preferred.
1. Payment Fees depend on the volume of transactions per month. The higher the volume the lower the fee.
Please take into account the speed of transactions. Some banks offer up to five-day transfers; other international payment providers for business can deliver the funds to the recipient the same day or on the next business day. Speed depends on the correspondent banking network of a used banking provider. Prominent bank names used by the banking provider would guarantee better speed and a greater variety of currencies. On top of that, a good international payments provider for businesses is able to make payments to more than 70 countries worldwide.
In addition to that, we generally recommend asking what correspondent banks a PSP or banking provider is relying on.
2. Account Type – it is recommended to look for a single IBAN solution that can allow for receiving and sending international payments for business in multiple currencies and in the name of the company. In addition, a good payments provider should be able to offer currency hedges, mass-payments, and API connectivity so that the payments platform is able to help the business scale once it grows.
3. Client Support - make sure you get a dedicated account manager who is always there to help during complex transactions or technical issues with the payments platform.
4. Client Testimonials – make sure to ask for client testimonials, or even better, if they have clients from your country. It is to find out if any big names are working with them or if the provider has experience serving your specific industry or sector. That should indicate the reliability of the provider. The less prominent providers are often having technical difficulties, can be less compliant with the regulator, and later on receive fines, eventually creating disruptions in the service and losing clients to the competition.
5. Safeguarding – another important question to ask is where client funds are being safeguarded. You should check the names of the banks and their reputations where the payments provider is keeping client funds. It should be the top-tier banks like Citi, Barclays, Deutsche Bank, JP Morgan, Goldman Sachs, Lloyds, etc. If it is an unknown bank in a high-risk country like Latvia, Romania, or similar, we wouldn’t recommend that to our clients.
How to Open an International Bank Account
Account opening for international payments for business nowadays is an easy and straightforward process. Anyone can do it online without leaving the comfort of their bedroom.
We at Epico Finance have multiple banking service providers in our network that can open single multi-currency accounts that are capable of transacting in 50+ currencies, exchange currency at competitive rates, and safeguard clients’ money at top-tier banks like Barclays, JP Morgan, and others.
We generally suggest digital bank that are in business for many years and can support private individuals or corporate entities in 50+ jurisdictions including off-shore like Belize, Panama, BVI, Hong Kong, Montenegro, Gibraltar, Bahamas and more. We also have experience in advising various corporate structure for bank account opening such as corporates, trusts, foundations, holdings, charities, religious structures, funds, family offices, SPV’s, etc.
Do not hesitate to contact us for a free consultation and we will help you to get local or international IBAN account, negotiate fees and optimise your payment and currency exchange workflows. We can also advice on back-office API integrations, complex or reoccurring transactions, OTC Forwards and currency rate fixing.
All in all, digital banks are changing the landscape of everyday international payments for business. The benefits of using Epico Finance as your advisor are that you are going to end up saving significant amounts of money and your precious time.