The Ultimate Guide for Global Payroll and Supply Chain Payments
If you need to make global payments for your business, you should seek out a payment solution that provides the best features and works for everyone involved. Here are several key factors that you should take into consideration.
Key Takeaways
- Payment services can help you perform global transactions, but there are several factors that you should take into account when choosing one
- Transaction costs, speeds, and currency exchange rates are important considerations
- Compliance with payment regulations should also be key to your decision
- Be sure to consider whether your preferred service is available in your region
With the rise of global commerce and business, companies need ways to transact with everyone from employees and freelancers to contractors and suppliers. Your business might accumulate several transaction partners, and you’ll need a solution that works for all parties.
Even though sending funds can be challenging and costly, with the emergence of EMIs like Payset, you now have more payment options available than ever before, and you can make an optimal choice.
In this article, we’ll explain everything you should consider and help you choose a payment solution that meets all of your needs.
Transaction and service fees
Almost every financial transaction involves fees.
Often, you’ll pay a percentage-based transaction fee, which ensures that you can regularly perform small and large transfers at a proportional rate. You can expect to pay 0.5% to 5% of the transaction value, though the exact percentage varies between platforms.
Some transactions involve different fee structures. For example, wire transfers carry flat fees, sometimes as high as $50. Flat fees are ideal for transactions involving large amounts of money, but they can be costly for small, recurring transactions.
Aside from transaction fees, you might need to pay recurring account fees, currency conversion fees, and costs involved with transferring money on and off a platform.
There are a few ways to save money on fees. Follow these strategies:
- Take a moment to select the cheapest transaction option on any platform
- Avoid wire transfers for small transactions
- Make payments less often to avoid per-transaction flat fees
- Bundle transactions for multiple recipients if you need to pay flat fees
- Avoid exchange rates and conversion fees by using a single currency
- If your payment service of choice offers free or discounted peer-to-peer transfers, encourage your transaction partner to use the same platform
Transaction speeds
You’re sure to want a payment option that will allow you to receive funds quickly – and it’s just as important to deliver funds to recipients on time.
Most payment services aim to carry out transactions as fast as possible, but in practice, the speed of each transaction depends on how it is performed.
Using your regional fast transfer system can speed up payments. For example, the UK’s Faster Payments Service (FPS) and the EU’s SEPA Instant Credit Transfer allow payments to be completed in a matter of seconds where available.
Peer-to-peer payments can also help you make rapid payments. When you and your transaction partner both use the same payment platform, your funds won’t need to leave the platform during the transfer, and this can greatly speed up transaction times.
Sometimes, you might need to use wire transfers, which are broadly accepted but can take multiple days for international transfers. Wires requested before cutoff times generally settle earlier, and domestic wires usually settle faster than international ones.
Currency exchange rates
If you make a transaction involving more than one currency, it will involve a currency exchange. Exchange rates can be beneficial or costly depending on each currency’s relative strength.
For example, if a recipient asks for a foreign currency, you might choose to pay when your local currency is relatively worth more. That way, you’ll spend less to make the payment.
Similarly, if you receive a foreign currency, you might benefit by holding it for conversion at a later date. Then, when the foreign currency is worth more compared to your native currency, you’ll receive more of your local currency when you finally perform the exchange.
There are also strategies for saving money: if you know that you’ll need to use a specific currency in the future, you can purchase it in advance at a favorable exchange rate.
Currency conversion usually costs money. Some services cover costs by offering higher-than-market exchange rates, allowing them to charge reduced fees or zero fees. Other services offer rates closer to the market but charge additional fees. You might find either model more affordable depending on the specifics.
International availability
Cross-border payment solutions aim to support as many locations and currencies as possible.
However, few platforms are truly universally accessible, and you need to determine whether your payment platform of choice is available in your region.
You should also consider whether your transaction partners will be able to receive funds in their location and whether the payment service supports the currencies that you need.
Make sure there’s a practical way to move funds on and off of the platform. You can typically use bank transfers to move funds, but bank connectivity varies by region and platform.
Optionally, determine whether you’ll be able to access global payment networks through the payment platform. Transferring money via widely accepted networks like SWIFT and SEPA can help you reach as many potential payment partners as possible. And even if you don’t need access to any particular network, having a variety of options will help you choose the fastest and most affordable transfer method at all times.
Regulatory compliance
To reduce risk and operate soundly, be sure to consider payment regulations.
Usually, this involves choosing a payment service that is compliant with know-your-customer (KYC) and anti-money laundering (AML) regulations. These regulations involve collecting customers’ personal information and screening them to prevent financial crime.
You should also choose a payment service that complies with insurance or safeguarding regulations to protect user funds. It should also comply with user privacy regulations.
The responsibilities that fall directly on you depend on the nature of your business. You might be required to comply with the above regulations, including KYC/AML, instead of relying on the payment service’s compliance. Your company should also observe rules around taxation, employee payments, and payments to non-employees such as freelancers and contractors.
Regulations vary greatly between countries and jurisdictions, and this article does not provide a complete list of obligations. Hiring a compliance officer can help you ensure you meet all requirements.
Choosing the right platform
When you need to send funds across borders, online payment platforms with a focus on multi-currency support like Payset can serve your needs.
At Payset, we aim to satisfy every client with fast and affordable global transactions. With support for up to 38 foreign currencies in more than 180 countries and access to a variety of local and international payment networks, you’ll be able to send funds almost anywhere in the world quickly and affordably.
Plus, we’re dedicated to regulatory compliance, customer support, and safeguarding of customer funds to ensure that your funds are secure all along the way.
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 is regulated as an authorized Electronic Money Institution by the UK Financial Conduct Authority. Our activities are also regulated by the Payment Services Regulation 2017 and the Electronic Money Regulation 2011 (SI 2011/99).
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
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