Last editedSept 20212 min read
Receiving international payments online can be a game-changer for any small business. The sky’s the limit when it comes to growth provided you can accept payments from new customers around the globe. However, to get started you’ll first need to work out the best payment system. Here’s what you need to know about international payments.
Types of international payment methods
There are numerous ways to send and receive international payments. Before we delve into their pros and cons to help you find the best fit, here’s a quick overview.
International bank payments: If you need to send a payment to a recipient who is part of the same banking group, you may be able to transfer funds abroad. The reverse situation applies, where contacts abroad could send you a payment. However, terms and conditions can be quite limiting and expenses high.
International wire transfers: You’re probably familiar with wire transfer services like Western Union and MoneyGram, which allow you to transfer money online. But how long do international payments take to clear using this method? It can be several days for full clearance – and there are also hefty fees involved.
Online payment transfers: The third option involves online payment processors who allow you to send and receive international payments online. These enable a variety of payment types, including international credit card payments, direct debits, and more, all of which we’ll discuss in greater detail below.
How long do international payments take to clear?
We’ve already mentioned that wire transfers can take several days to clear, and the same holds true for international bank payments. You can expect a clearance period between three and five business days in most cases. For faster transfers, look to online payment gateways like PayPal and you could transfer funds in real-time.
The benefits of multi-currency accounts
Another factor to consider when comparing your options is supporting different currencies. If you’re accepting payments from multiple countries, you’ll need a payment platform that can convert and deposit multiple currencies accordingly. Without a multi-currency processor, you’ll need to open multiple overseas bank accounts – a costly and time-consuming venture, to be sure. Multi-currency transfer services operate like an online bank account, allowing you to list your products in different local currencies and benefit from the best exchange rates.
How do online payment gateways work?
Whether you’re looking at Stripe, Shopify, or PayPal, what these services all have in common is that they are online payment gateways. They all can also be used to accept international payments online. But how do they work? Most will integrate with third-party services to provide multiple payment methods to your customer base.
This means you can integrate them directly into your current business website to facilitate international sales. Payment methods include:
International credit card payments
International bank payments
The best gateways will also include added features like recurring bills, user support, and subscription capabilities. Per-transaction fees and features will vary widely, so be sure to compare all options carefully.
How to choose an international payments solution
Now that we’ve given a brief overview of the international payments landscape, how can you choose the right solution? You’ll need to first think about the countries where you plan to sell products or services online. Any payment solution should support your countries and currencies of choice. Take care to compare transfer fees as well as currency exchange rates when you’re looking at terms and conditions for various platforms.
You should also think about processing times. Methods like wire transfers are both costly and inefficient, as is the process of opening multiple bank accounts for individual transfers. For most online businesses, international payment gateways like GoCardless will be the best option.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.