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How to choose the right cross border payment solution

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedMar 20232 min read

If you send or receive international payments, it’s worth researching the best cross border payment solution. Both B2B and B2C businesses now have more options than ever to help reduce friction and maximize efficiency when it comes to cross border transactions. Today’s technology can help you save time and money – keep reading to find out how.

What are cross border payment solutions?

Any financial transaction involving parties in at least two different countries can be referred to as a cross border payment. Payments might be sent between individuals, banks, organizations, or businesses, and they can be either wholesale or retail. As money flows across borders it is subject to unique challenges, not least of which is the logistics of currency exchange. A few payment methods used to facilitate these transactions include:

International wire transfers
Credit card payments
Digital wallets
Mobile apps

While in the past cross border payments were costly and time-consuming, today there are plentiful cross border payment solutions. These are third-party services that automatically handle currency exchange when transferring money from one bank account to another. Accounts are credited in the sender’s country and debited in the recipient’s country, using a third-party payment processor to handle the logistics. Cross border bank transfers typically use the international SWIFT network with unique SWIFT/BIC or IBAN codes pertaining to each bank.

What types of cross border payments are there?

With the international payments market on the rise, there’s an increasing number of different solutions:

B2B cross border payment solutions facilitate transfers sent from one business to another.
C2B cross border payment solutions facilitate transfers sent from a customer to a business.
SaaS cross border payment solutions facilitate payments from customers to access SaaS services.

You can also break down the cross border payments market into those that focus on wholesale transactions and those that focus on retail transactions.

1. Wholesale payments involve large sums of money and take place between banks or other financial institutions. Examples might include financial market trading, lending, and wholesale imports and exports.

2. Retail payments involve smaller transactions between individual consumers and businesses. As a small business owner, you probably will need a cross border payment solution to facilitate this type of retail transaction.

What are cross border payment issues that arise?

The best service providers solve common cross border payment issues. The first issue is the cost of sending and receiving cross border payments. International transactions can be quite costly not only due to currency exchange rates, but also the fees of transferring money between multiple intermediaries.

Apart from cost, the timing of cross border payments is also an issue. If you use traditional banking services, these transactions can take anywhere from one to five days to settle. The time frame can be even longer depending on regional differences, holidays, and weekends.

How to choose the best cross border payment solution

The best cross border payment solution will address the issues of time and cost mentioned above. You want to find a service provider that can help you send and receive money quickly and at low cost. Here are just a few additional factors to consider as you compare your options:

Does the gateway support a variety of different payment methods?
Which currencies can the gateway support?
What are the currency exchange rates?
Are you charged per transaction or are there additional subscription fees?
Does the platform charge for set up and cancellation?
What type of customer support is available?
What are the settlement times for payment processing?

Be sure to read reviews carefully when comparing your options to find the most suitable option. GoCardless is a great option for businesses collecting international payments. We enable businesses to receive cross border payments from over 30 countries, all at the real exchange rates. This cuts down on costly exchange and transfer fees using a transparent pricing plan. GoCardless also reduces processing time by allowing merchants to collect payments directly from international bank accounts. Save time and money all while providing customers a seamless shopping experience.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.