Essential Tips to Improve Your International Business Payments

Technology connects everything. In such a tech-knit world, connecting people for businesses across borders is also easy. Earlier, only larger enterprises could have international connections. But today, technology makes it possible for even freelancers and small businesses that sell on e-commerce sites to have international customers. 

But the payments across countries are still a headache until they reach your account, especially when you are a small business owner. Many small businesses find it difficult to receive payments and send refunds to international customers. Small businesses often have to struggle with the regulations, difficulty and cost of performing international business payments. 

Here are some handy tips to make your next global payment experience smoother. 

Tip #1 - Specialize in your customer’s local payment platforms

Different countries have different payment platforms as their popular and commonly used mode of payment. For example, most people in Canada and the United States rely on PayPal for their personal transactions. China uses WeChat Pay and AliPay predominantly and India goes with GPay and  PhonePay for everyday transactions.

As a global business owner, you should take time and research on which payment platform the country that you cater uses. Consider those platforms as one of your payment methods on your e-commerce site and invoices with payment links. 

If you circulate your products or services only within your country, you must always integrate the most popular payment platform currently prevailing in your checkout pages. It creates familiarity for your customers and gives them a secured feel of payment as they have paid through that platform a hundred times already. 

Likewise, people from other regions of the world would also get a secure and familiar feel when they use the payment platform that they are already using. If not, they would be hesitant to use the new ones and might lose ease until the payment is confirmed from your end. 

Or, you might opt to get paid from international credit and debit cards as it is easy and handy for almost everyone across continents.

Tip #2 - Define your currency strategy

International business payments are tricky. The currencies change in value every day. This might confuse your customers when they see all the pricing information in another currency. 

Let us say, you have a major crowd of customers from the United States and upto one-third of customers from other countries. When customers from other countries visit your e-commerce site, they prefer to know the price of each product in their currency. 

When they see dollars everywhere, they have to check the current currency conversion rate and then do the math for every item to know the price and make purchase decisions. Moreover, price information in their local currency, again, gives them familiarity, while they hesitate when they are in other currency. 

American Express recently found that over 30% of the customers abandon their payment on the spot when the checkout has to be done with another currency. The best thing you can do is add an option to select the country before they surf through the products or services listed on your e-commerce site. 

So, B2C transactions must facilitate customers to pay in their own currency to ensure that they are paying a known value for each transaction. 

But in B2B transactions, you are a customer to your supplier. In that case, you can prefer to pay in your local currency. You don’t have to do the currency conversion or worry about foreign currency risk. 

Tip #3 - Try using SWIFT and CHIPS codes

If you want to receive money in US dollars, get familiar with the SWIFT and CHIPS, two major codes used for global transactions. SWIFT is like an international bank code that identifies banks of the sender globally. It gives information about where the money you receive comes from and who sends it to you. 

And CHIPS is an e-payment system that transfers funds and settles them to your bank account in US dollars. These payment methods can be used when you do B2B transactions to your foreign suppliers in large volumes. These codes make cross border financial communications easier as some information may be obscure in translation. 

Tip #4 - Minimize international transaction fee

Global payments are known for being expensive, due to the cross border transactions fee by banks and payment processors. The transaction fees are a major barrier to small businesses as they sometimes eat up a considerable sum of money from their profits. 

Different payment processors and methods have laid different fees for transactions. So, make sure you choose the payment processor that offers minimal and affordable international transaction fees. 

Tip #5 - Observe global payment compliance

Selling products across borders means putting extra time and effort to ensure that you are compliant with all the laws and regulations. You will have to keep tabs on any updates on your country's regulations as well as the country you are doing business with. 

Some countries have strict regulations on financial and data security aspects. For example, the European General Data Protection Regulation (GDPR) is concerned about the protection of people’s personal data and lays laws on what can and cannot be done with the customer’s data. So, you must always stay informed about the global law updates.

Moreover, money laundering is a prevailing issue and most countries are keen on penalties, fines and criminal sentencing even if you are unintentionally involved. Observe the regulations carefully and maintain global law and payment compliance. This compliance not only saves you time and money but also makes you do the right thing. 

Now you know how to manage your international business payments with ease and efficiency. Keep yourself equipped to fulfil your customers’ payment desires and get your gears ready for seamless cross border transactions. 

If you are zapped out with the currency conversion and number crunching while importing them into your accounting system, try using PayTraQer for QuickBooks. PayTraQer can sync your international and local transactions into QuickBooks, calculating the currency conversion before sending them into QuickBooks automatically. With accurate numbers, reconciliations run smoothly and your books will be perfectly balanced. Try PayTraQer now free for 30 days and save time and number crunching headaches.