In the second of this 3 part series, I examine the most common mistakes businesses make in relation to their international payments.
Whether you’re a small importer / exporter buying or selling goods and services from abroad, a larger business repatriating income from overseas operations, or a global entity undertaking thousands of transactions a month, when making international payments there are a range of mistakes that businesses make which may result in unnecessary costs, delays and additional work.
Below, I highlight the most common mistakes in relation to international payments, aiming to provide an easy to use checklist to help to make international payments as cost effective, quick and as pain free as possible.
Do you have an understanding of all of the costs involved?
When comparing different options for international payments, ask yourself “How much foreign currency will I get for my money, after all the charges have been applied?”, including:
- Fees: The charges that you see. A multitude of fees, charges or commission can apply, both for the sender and the recipient. Providers may levy lots of small charges to disguise exactly how much it costs.
- Exchange rates: The charges that you don’t see. Many banks and providers will claim to offer commission free transfers then simply give you poor exchange rates instead. As a result, it’s often really difficult to compare one provider with another as some will publish charges and others don’t.
Have you done enough due diligence on your international payments provider?
It pays to do a bit of due diligence on your chosen provider as cheapest may not mean best. Some of the areas you should look to check before deciding which provider to use include:
- How strong is a company’s balance sheet?
- How many staff do they have and how big are they?
- Do they have access to the SWIFT network and how good is their payment processing?
- Are they audited by reputable auditors?
- How many other businesses trust them with their international payments needs?
- What online security measures do they have in place to keep your funds safe?
- Are they authorised or regulated by the Financial Conduct Authority?
What do you need from the international payments provider you have chosen to work with?
Both you and your business are unique and will therefore have your own specific needs which will directly impact what you need from your chosen provider. We suggest you ask yourself some of the following questions before choosing an international payments provider:
- How much forward visibility do you have of your foreign exchange requirements?
- Do you prefer to do most of your business’ finances over the telephone or prefer to speak to an expert for additional peace of mind? Or would you like access to both?