international payments

International business used to be reserved for large companies that could afford the slow and expensive process of cross-border payments. Waiting for your money to arrive, paying for the transfer and then paying a high currency exchange fee, simply wasn’t something SMBs could afford to do. However, times have changed; businesses no longer rely solely on the banking system for international payments. The emergence of safe, compliant international payment services has made it infinitely easier, faster and cheaper to expand your ecommerce business internationally. Whether sending or receiving them, cross-border payments are no longer a massive obstacle on the road to global success.

Let’s take a look at some of the myths and outdated perceptions about international payments that hinder some eSellers from taking the next step to advance their business.


Myth #1: International wire transfers are the best way to handle international payments

Ha. Have you ever sent or received an international wire transfer? They can be painfully slow and quite expensive. MyBankTracker recently ran a comparison of the fees for incoming international wires at 10 of America’s biggest banks, and found the average fee to be $17 per transfer; for outgoing international wire transfers, fees climb to an average of $46. Depending on the countries you’re sending to or receiving payments from, wire transfers can take up to 15 business days…yikes. As far as cash-flow goes, this can seriously hinder your ability to conduct business.

Consider working with an international payments solution rather than a bank for receiving and sending funds abroad; particularly one that can guarantee a money transfer window of several (and not 15!) business days at most.


Myth #2: There are many different currency exchange rates

This is simply not true. There is only one exchange rate: the mid-market rate (also called the inter-bank rate). Foreign currencies are traded in international currency markets daily; the mid-market rate is defined as the meeting point between the buy and sell prices of the two currencies. It fluctuates all the time based on supply and demand, but at any given time there is only one rate.

Banks and other financial institutions might cleverly mask their currency exchange fees or commissions as part of their offered rate for currency exchange. Oftentimes, the fee is pre-calculated into the exchange rate, allowing them to falsely claim that they charge “No fees!” or “0% commissions” on currency exchange. Here’s an example: let’s say that at a specific moment on a specific day, the mid-market currency exchange rate between EUR and USD is 1.2, meaning, if you wanted to change 100 euros into dollars, you should get $120. Your bank might tell you that “their” currency exchange rate is 1.12, meaning you’ll get $112 for your €100. In fact, what they did there, is calculate their fee into the existing exchange rate; the $8 difference is their fee.

This can pose a particularly complicated issue if you’re trying to pay someone abroad in their own currency, or when you’re expecting to receive a certain sum as payment and the final amount is significantly lower.

Be wary of “no fee” claims; look up the actual mid-market rate on independent sites like Yahoo Finance or XE and compare the rate you’re being offered to the actual exchange rate. It’s best to choose a provider that is transparent about fees and offers a competitive rate.


Myth #3: Sending or receiving funds online is risky

With all the news about breaches to big retail websites and the most recent hack putting 143 million Americans at risk for identity theft, you might feel more nervous than ever providing sensitive information online. However, serious online money transfer services have stringent security measures in place to ensure that your money and personal information are secure. In addition, financial institutions will have insurances in place to protect you, just in case something should go horribly wrong.

Read up on the security measures offered by the payment solution you choose, especially if it is one you haven’t heard of before. You can also look up reviews from users on their experiences using the services.


Myth #4: If I want to open a bank account in another country, I need to go there physically

If you’re selling on international online marketplaces like Amazon UK or Amazon Germany, you’re going to need a local currency bank account to receive your sales payouts (in GBP or EUR, respectively). This doesn’t mean you need to buy a plane ticket to London or Berlin and walk into a bank.

Many payments solutions offer alternatives to opening up a physical bank account in a foreign country. By providing you with a receiving account in the country and currency you require, you can receive payments from eCommerce marketplaces like Wish, Lazada,, Amazon UK, Amazon JP, and many others. It’s quite simple: you get a receiving account number, you plug it into your seller account details, payouts are transferred to your virtual account, without you having to set foot out of the country.

International payments aren’t a complex enigma to be solved only by big, international companies. Ecommerce businesses big and small can enjoy the benefits of selling internationally without suffering from slow or expensive payments.

About the Author: This guest post was written by Payoneer. Payoneer offers an end-to-end solution for international eSellers, enabling them to get paid by marketplaces like Amazon, pay their international suppliers and vendors, all with low fees. To learn more or sign up for a Payoneer account (it’s free), click here.

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