A Complete Guide to Making International Business Payments
Making an international business payment can be difficult if you aren’t familiar with certain types of payments and phases used in transactions. Our guide will help you to get started making international business payments with ease.
If you’re a business owner, you’ll likely need to send and receive payments both inside and outside your country of operation.
Here’s what you should know about making international payments.
What is an international payment?
International payments include any transaction that involves sending money to or from another country. These are also known as “cross-border” or “borderless” payments.
Though this guide is targeted at business owners, the term “international payments” applies to personal, commercial, and business payments alike. The rise of digital commerce means that international payments are more common than ever before.
What are the different types of international business payments?
International payments can be divided into two types: wholesale and retail payments.
Wholesale payments are transactions that involve multiple banks or financial institutions. This category can include various types of transactions such as standard payments, borrowing, lending, and foreign currency exchange.
This type of payment does not directly involve individuals or businesses.
Retail payments are transactions that involve a business and an individual.
Retail payments may include a transaction in which an individual pays for a product or service. They may also include transactions made by a business, such as salary payments, business-to-business (B2B) payments, or other payments.
This type of payment does not need to involve the retail industry. Rather, it involves bank customers who are considered retail clients.
How do international business payments work?
International business payments are possible because the banking industry has agreed to use various global standards and networks that are capable of moving money.
Individual banks can connect over financial networks like SWIFT (which is used throughout the entire world) and SEPA (which is used in the European Union). Plus, financial institutions that are isolated from the rest of the global banking system can rely on intermediary banks to perform international payments.
In addition to transacting and settling with other institutions, banks record credits and debits in accounts order to keep the relevant balances up to date.
How do you make an international business payment?
In order to make an international business payment and route it to its proper destination, you’ll need to provide various pieces of information.
Exactly what information you must provide depends on the network that your transaction will take place on. However, you will generally need to provide the recipient’s name and country, as well as their IBAN number and the SWIFT/BIC code of their bank.
You may also need to provide information that proves you are the owner of your account. If you are banking online, this includes your username, password, and a 2FA code.
If you are not sure what information you need to provide, ask your bank.
Do I need a business bank account to make an international business payment?
Though many large companies rely on traditional banking for their financial needs, you do not strictly need a business bank account to make international business payments.
You can instead rely on a multi-currency account or a similar payment service to perform your international transactions. This option is fast and easy, and it may be preferable for small and medium-sized enterprises (SMEs).
In other words, SMEs may not want to go through the process of signing up for bank services, which are often designed to serve larger companies.
At Payset, we offer multi-currency accounts with fast registration and low rates.
What should I look for when choosing a business bank account?
When you are choosing a business bank account, you should consider various factors including rates and fees, transaction speed, and overall quality of service. You should also consider the company’s security practices.
Other features are not as negotiable: you must ensure that your provider serves customers in your location and works with your currency of choice.
How long does an international business payment take to process?
There is no set amount of time that it takes to process an international business payment as it depends on the network used to process the transaction.
Payset advises clients of the following expected transfer times:
- SWIFT payments can take up to 2 business days
- SEPA payments can take up to 2 business days
- FasterPayments can take up to 4 hours
- CHAPS can take until the end of the business day.
- ACH can take up to 3 business days
- BACS can take up to 3 business days
- TARGET 2 payments can take up to 2 business days
On the off chance that a payment is delayed, there may be various reasons. Payments made later in the business day, or before a weekend or holiday, may not be initiated immediately. Additionally, certain small banks and banks in isolated countries may not have a strong banking network, which can lead to further delays.
Some banking networks provide guarantees or estimates. SEPA payments are guaranteed to arrive on the same or next business day. Though SWIFT does not provide any such guarantee, SWIFT payments usually arrive within 1 to 5 working days.
How much does it cost to make an international business payment?
International payment costs are determined by individual banks and companies.
Generally, you will need to pay a transfer fee — usually 5% of the transaction or less. You may also need to pay separate monthly account fees. Depending on the terms of your account, your monthly fee may reduce or eliminate the cost of each transaction.
These costs exist because most banks pay membership and service fees so that they can make use of financial networks.
As such, the best way to save on fees is to send money to someone who uses the same network as you do. Payset, for example, allows customers to send free transactions to other individuals and businesses who use our services.
Are international business payments safe?
Yes. International business payments are safe and secure. Because they are handled by established banks and processors, your funds should always reach their destination.
However, you should be aware of who you are sending money to. Fraudsters and scammers may request international payments from you.
If you think you’ve made a payment to a suspicious party, let your bank know as soon as possible. They may be able to reverse the charge.
What services are available to make and accept international business payments?
At this stage in the history of digital technology, old school bank wires are rarely the most efficient or cost-effective way to make an international business transaction, though many still prefer them due to perceived security and reliability. Increasingly, the preferred method is via en e-wallet like Paypal, Wise, WorldPay, Amazon Pay, Stripe, etc.
Payset is part of a new generation of borderless payment services that offer the rapid transfer capabilities of a Paypal while also providing a multicurrency account allowing you to hold 34 currencies in one account, fast and cheap local payment options in the US, UK, Canada, and EU, low-fee currency exchange, free and instant payments to other Payset clients, and the ability to transfer money to and from a bank account virtually anywhere in the world.
International Business Payments: Jargon Decoded
What is SWIFT?
SWIFT is a global banking network. Though technically a messaging network, it plays an important role in settling financial transactions.
It is used by 11,000 financial institutions in more than 200 countries, making it one of the most widely-used financial networks.
Businesses and individuals may transact over SWIFT indirectly — for example, through bank wire transactions. The cost to transact in this matter may be a percentage-based fee (up to about 5%) or a flat rate (up to about $50). Transactions made via SWIFT are usually completed in 1 to 5 business days.
The abbreviation “SWIFT” stands for “Society for Worldwide Interbank Financial Telecommunications,” which develops and provides the service.
Business Identifier Code
A Business Identifier Code, or BIC, is a code that is used to route payments to a bank over the SWIFT network. These codes are sometimes called SWIFT code. BIC and SWIFT codes only refer to specific banks, not to individual accounts.
What is SEPA?
SEPA is a EU-wide bank integration initiative. It allows for efficient settlement of transactions involving the euro in its member countries.
SEPA transactions are available in 36 countries across the EU. Notably, the list of supported areas excludes several Nordic countries.
SEPA transactions are guaranteed to arrive on the same day or on the next business day depending on when they are sent. Banks may charge varying fees for SEPA transactions, but the fee should be the same as for a domestic transaction (that is, a transaction that does not leave the country) .
The abbreviation “SEPA” stands for Single Euro Payments Area.
What is an IBAN number?
An IBAN number is a string of data that identifies a bank account at multiple levels. The code identifies a country, a bank, a bank branch, and a specific account. An IBAN code also contains check digits so that banks can verify it.
The last piece of identifying information in an IBAN code — the bank account number — is referred to as a Basic Bank Account Number (BBAN).
“IBAN” stands for International Bank Account Number.
What is a routing number?
A routing number is a code that identifies a specific bank or financial institution. It may be found in your bank account or at the bottom of a check. You probably will not need to use a routing number for card payments, but you might need to use a routing number if you are making in-bank or online payments.
How Payset Can Help
Payset provides a go-to service for business users who need to transact globally. By signing up, you’ll receive an IBAN account and a multi-currency exchange.
We provide access to more than 38 foreign currency pairs and we allow users to transfer funds over top payment networks including SEPA, SWIFT, and more. We also offer rates tailored to individual users and competitive transaction speeds.
Payset is regulated in the U.K. as an Electronic Money Institution (EMI) and is permitted to serve clients around the world in more than 200 countries.
To sign up, click below.
Frequently asked questions
What is a multi-currency account/virtual IBAN?
A Payset multi-currency account allows you to receive money in 34 different currencies and send money in up to 38 currencies, all within the same account.
You can deposit and withdraw funds, convert currencies at competitive exchange rates, and hold your chosen currencies to capitalize on market movements.
A Payset multi-currency account allows startups and business owners to receive payments from clients virtually anywhere in the world and pay suppliers, staff, and contractors quickly and affordably in their chosen currency.
- Funds can be deposited and withdrawn from the account for a small fee.
- Account holders can send and receive money with other Payset users for free.
- Depending on your region, you can use various payment networks from your Payset account, including SWIFT, SEPA, ACH, Fedwire, Faster Payments, BACS, and CHAPS.
- Once you register an account, you will be provided with a Virtual IBAN (International Bank Account Number), which makes all of these transfers easy.
- We provide you with local payments and collections. For example, transactions in USD, EUR, CAD, and GBP are processed through the local payment networks, which is far cheaper and takes minutes as opposed to days
Are there limits on the amount of money I can send and receive?
No, there are no transaction limits on Payset multi-currency accounts.
However, higher-volume transactions may require additional anti-fraud verification. If you plan to make a large transaction, contact us in advance to avoid verification delays.
How is Payset regulated?
Payset allows you to receive payments in 34 currencies. You can send payments from your account in 38 currencies. For more details, check our payment guide.
How do I add money to my account?
How do I send money from my account?
Once you have opened your verified IBAN account and added money to a balance, transferring funds is simple.
Simply log in into your account and add a beneficiary, then simply “make a transfer” in your preferred currency to that beneficiary.
Types of Multi-Currency Accounts
Information contained in this publication is provided for general education and information purposes only and should not be construed as legal, tax, investment or other professional advice or recommendation, or an offer of, or solicitation for, any transactions or any other actions (or refraining therefrom); This material has been prepared without taking into account any particular recipient’s financial objectives or situation. We make no warranty, guarantee or representation, whether express or implied, as to the completeness or accuracy of the information contained herein or fitness thereof for a particular purpose; Use of images and symbols is made for illustrative purposes only and does not constitute a recommendation or advice to take or refraining from any action; Use of brand logos does not necessarily imply a contractual relationship between us and the entities owning the logos, nor does it represent an endorsement of any such entity by Pay Set Limited, or vice versa; Market information is made available to you only as a service, and we do not endorse or approve it; Any reference to past performance, predicted returns, or likelihood performance scenarios may not reflect actual future performance and certainly do not guarantee future outcomes.