Growing a business is fulfilling and adrenaline-rushing, especially if everything goes as planned. The possibilities and opportunities seem limitless. However, such growth is often difficult to maintain, especially if the expansion isn’t well thought of.
To expand your business and establish your customer base, you may have to interact with audiences overseas. Selling from one country to another enables you to reach more customers, and when done correctly, you can take your business to new heights.
When it comes to overseas business operations, choosing the right payment method for receiving money is crucial. International payments usually involve two currencies, which occurs when expanding sales toward other countries.
However, receiving international payments can be costly and tricky. Also, using only one payment method can affect your cash flow. This is especially true if there’s an emergency with your sole bank account.
Furthermore, the charges for receiving money from other countries can be hefty, even for personal use. If you want to know how to accept money from your overseas customers without spending too much, here’s a list of payment methods you might want to consider.
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1. To Receive Payments Use A Multicurrency Account
A multi currency account (e.g., Wise—formerly TransferWise) allows you to send and receive money from multiple countries in different currencies without creating new bank accounts. In other words, it’s an online bank with a presence in different countries, such as the United States, Canada, Australia, and the United Kingdom, for faster and more convenient transactions.
Here are some advantages of using a multicurrency account:
- Creating an account is quick and easy.
- Multicurrency accounts are accepted in almost all parts of the globe.
- Multicurrency accounts offer competitive exchange rates compared to local banks.
- Multicurrency accounts allow you to accept payments from international clients in different currencies.
- Creating a multicurrency account doesn’t require extra charges and setup fees.
- All the money received from a multicurrency account can be transferred to your local bank after two to three days.
However, there are still disadvantages to consider, such as the following:
- Some multicurrency accounts have limited coverage in terms of countries and currencies.
- Some multicurrency accounts have limits on the amount you can receive.
These disadvantages will likely change as technology further evolves and develops.
2. International Wire Transfer
An international wire transfer can be interbank or intrabank. Understanding the difference between the two may help you receive money overseas efficiently.
- Interbank International Transfer: This is a common payment method used by most people who purchase items from other countries. It refers to the money wired from a local bank to a bank from another country. Both banks have to follow the regulations of their respective countries to prevent legal issues during the transaction.
- Intrabank International Transfer: This refers to the money wired through the same banking institution but in a different country. The transfer can be processed through the Society for Worldwide Interbank Financial Telecommunications (SWIFT). For example, bank A from country A wires money to bank A but in country B via the SWIFT network.
Here are some advantages of using an international wire transfer:
- Money can be transferred and received in real-time, typically around one to two days.
- Receiving payments through an international wire transfer is extremely convenient—everything can be done in the comfort of your home.
- International wire transfers are generally safe because both banks follow legal restrictions and regulations.
However, international wire transfers can be costly. Also, it’s nonreversible: once a payment has been made, there’s no way to retrieve it in case there’s an error in the amount transferred.
An eWallet is an online financing account that allows you to store money for later use via your mobile device or computer. It’s equipped with essential banking functions for easier, more efficient, and more secure transactions at just a touch of a button.
Also, using an eWallet is economical, but you need to know if your customers are using the same eWallet account. If you’re still unsure, you should consider eWallet’s top-notch security, convenience, and relevant user experience.
4. International Money Order
International money order (IMO) is a time-tested payment method. It’s similar to how wire transfers work but fairly economical, and the amount is paid upfront, either in credit or cash.
However, receiving funds from IMO is inefficient—it takes too much time to process and isn’t as secure as wire transfers because it’s difficult to trace and authenticate. So if you have a huge customer base overseas, IMO may not be your best option. You might want to consider other methods above instead.
Entering the international market is a great opportunity for a growing business, but it can be daunting and overwhelming. Choosing the right payment method may help ease the process by helping you receive funds from different customers worldwide. Also, when choosing a payment method, make sure to consider your needs, timing, and conditions. If everything is agreeable, then you may proceed with your business and expand your influence across territories.