Everything You Need to Know About Business Overseas Payments


Everything revolves around money in the business world. 

It’s like they say – no paycheck, no on-time check. 

However, the struggle is real for corporates when it comes to corporate forex transactions. 

The documentation, the processing time, and bank delays- anyone is bound to feel frustrated when payments don’t go through on time. 

If vendors are forced to stop their service, then everything comes to a standstill. 

So in this blog post, we shall cover all that you need to know about business overseas payments and the best options you have to do the same. 

Affordable International Business Transfer Process

Bank currency transfers may not be wise. Banks often charge fees and exchange rates that primarily benefit themselves. It’s important to note that both the sender’s and recipient’s banks may impose fees, exceeding the estimated 3% figure.

Hence, we must evaluate the international money transfer scenario and explore cost-efficient options to transfer funds globally, facilitate payments, and receive payments in foreign currencies to minimize expenses.

1. Bank Transfers

The systematically important banks (SIB) such as ICICI, HDFC, and SBI are the leading contenders for providing excellent business forex services. 

Other banks like Kotak and Axis are also catching up to provide good competition. However, the biggest hurdle for businesses is the cumbersome bank documentation process.

The highly regulated banking sector falls short of delivering a satisfying client experience due to the strict regulations on money leaving the country, specifically A2 transactions.

2. Fintechs 

The great news for businesses is that they now have various online finance solutions for international money transfers. These are both cost-effective and speedy, so they no longer have to depend solely on banks.

Several fintech has emerged that provide innovative corporate forex transfer products, offering exceptional services. 

In India, Karbon Business, known for its corporate credit card services, has extended its product range to include international vendor management services with its forex product. This sets it apart from its competitors with its end-to-end processing feature for all corporate invoices.

Moreover, online banks such as Payoneer and Wise offer prompt and affordable international money transfers and provide easy-to-open, low-cost business banking accounts.

3. Currency Brokers

Although online platforms like Wise and Revolut have distinct advantages, they may not always provide the most favourable exchange rates. Naturally, small businesses will need to consider taking the services of a currency broker seriously. 

Currency brokers, as the name suggests, can assist their clients in securing the most favourable deals on forex and regularly offer the most competitive fx rates for businesses. 

They leverage their network and substantial volume to deliver exchange rates that can even surpass the market rate on occasion. 

Currency brokers are particularly valuable for businesses requiring significant exchanges and may be less attractive for smaller transactions.

Apart from facilitating payments, currency brokers can also be utilized to receive business payments from overseas by instructing the payee to deposit the funds into the brokerage account.

Using a currency broker has several additional benefits. 

Opening an account with a broker provides access to a dedicated account manager who is familiar with the business, associated B2B payments, forex risks, etc.  This enables a currency broker to offer personalized guidance on forex management.

Online Providers vs Currency Brokerages

There is no universal solution that fits all scenarios. Different businesses have distinct requirements. 

In essence, currency brokers specialize in SME currency exchange and are particularly effective in managing medium to large transactions. 

Make Note: An instance where a currency broker can be advantageous is when a business needs to settle a substantial invoice in a foreign currency.

In contrast, online platforms can be more beneficial for low-level transfers, such as settling small invoices, conducting prompt payments, or receiving payments from retail customers. 

Many businesses may discover that there are occasions where both types of services are useful, and the great news is that companies are free to use both as needed.

Factors Involved In International Money Transfers for Business

1. Transfer Amount

  • To transfer a large amount of money, it is best to find a provider with a higher transfer limit.
  • This can help ensure a smooth and efficient transfer process.
  • It is advisable to do research and compare transfer limits among different providers before selecting one.
  • Keep in mind that some providers may charge higher fees for transfers of larger amounts.

2. Frequency 

Certain companies provide special offers and the convenience of automatic recurring transfers for regular payments.

3. Geo-Location 

Most money transfer services cover payments to major countries and currencies, but additional research may be necessary for payments to other countries.

4. Transaction Pathway

Performing a money transfer online is typically less expensive than an in-person transfer.

If you are frequently on the go, using a mobile app is often the best option. As a result, it may be beneficial to find a provider with a high-quality mobile app.

5. Foreign Exchange Products 

Managing currency risk may require a variety of products. 

For instance, if you are paying a New Zealand contractor in NZD from your Indian Rupee account, you should look into the exchange rate to minimize any potential currency fluctuations.

6. Support Needs

You may require the assistance of a personal account manager to handle your transactions or, at the very least, access to 24/7 online support.

Achieving the Best of Both

However, some companies have found a way to provide the best of both worlds. 

Several currency brokers, including Worldfirst, OFX, Moneycorp, Currencies Direct, and Spartan FX, have recognized the challenge posed by the emergence of online money transfer platforms and have started offering SME money transfer services.

These brokers are now equipped to handle a business’s forex requirements, offer competitive foreign exchange rates, and manage money transfers. 

Essentially, all a business has to do is approach its broker, specify the amount of money they need to send in the designated currency and its destination, and the broker will take care of the entire transaction. 

While the broker will charge a fee, the more favourable exchange rate they can provide can offset this and create a “one-stop” and seamless service. You need to learn how to keep your business finances in order, for considering the best rates. 

The Bottom Line

In today’s challenging economic climate, every penny matters. This is especially true for businesses that regularly conduct international transactions. Such companies need to approach this matter with the utmost care.

By utilizing the services of a reputable currency broker and becoming familiar with the process, a small business can potentially reduce the transaction cost on foreign exchange transfers from 3% to a few percentage points.

Ultimately, there will always be some cost associated with international money transfers for businesses.

In short, the key to success in the global marketplace is smart money management. By leveraging the available resources and expertise, businesses can keep more of their hard-earned money where it belongs: in their pockets! 

So, don’t let high transaction fees drag you down – take charge and start maximizing your international money transfers.

The time is now.

Author Bio

Ramitha Ramesh is the editor at Karbon Business, renowned for her expertise in SEO content marketing strategy for a diverse clientele across the US, UK, and India. With a penchant for exploring the fast-paced realm of finance, business, and banking, her blog is a treasure trove of insights that offer unique perspectives on the latest trends and developments in the industry. Finding nirvana in food, fun, and travel, she is on a mission to counter the infodemic of the digital world.

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