Last editedFeb 20232 min read
Expanding your company's reach to an international market offers an exciting way to promote growth. Yet before you kick start this new phase, it’s important to sort out a few logistical issues. Apart from shipping and tax concerns, you’ll need to determine the best way to accept international payments. The best methods offer favorable exchange rates, low fees, and fast settlement. In this guide, we’ll review your options so that you can find the best fit.
Why should you accept international payments?
Before diving into your options, it’s helpful to first outline the benefits of international transactions. Opening your doors abroad introduces your products and services to a brand-new audience. This can increase sales, improve revenue, and grow brand awareness all at once. Part of a successful rollout is determining how to accept international payments.
Think about your intended market and any regional or cultural differences when it comes to payment methods. Shopping habits and payment trends vary between countries. Mobile commerce is more popular in some regions, while others prefer credit card payments. Finding an international payment provider that caters to a variety of preferences will help improve your chances of success.
How to accept international payments
From payment gateways like PayPal to online bank accounts like Wise, there’s a wealth of options that can help you accept international payments. These vary in terms of functionality, processing fees, and processing times, so it’s best to weigh all options carefully.
1. Online banking apps
The first option is to use a service like Wise, formerly known as TransferWise and used by GoCardless to facilitate international payments. This lets you open a virtual bank account that holds funds in multiple currencies. When customers send you a payment, they do so in their own currency and the funds are distributed into a “local” bank account before converted into USD in your own account. This makes exchange rates more competitive since you can access the real interbank rate without additional fees. However, these services aren’t available in all countries, so you’ll need to see if they apply to your intended market.
2. Online payment gateways
The next option is to use an online payment gateway that can be integrated with your ecommerce shop. PayPal is one of the better-known options out there, but there’s a wide selection of payment gateways including Stripe, Braintree, Amazon Pay, and others. If you want to accept international credit card payments online, you’ll need a third-party gateway that’s fully PCI compliant for security purposes. Many gateways provide additional payment options including digital wallets, cryptocurrencies, and recurring billing.
3. International wire transfers
A third option is to accept international wire transfers, which are deposited directly into your bank account. Due to the high fees and added admin of this type of payment, it’s not suitable for an ecommerce store. However, if you have a service-based business dealing with larger projects, it might be an acceptable option. Wire transfers are secure since funds move through the global SWIFT network. They do come with higher fees attached which can be off-putting to your clients.
The best way to accept international payments
There’s no need to choose a single method for accepting international payments. Most businesses will use a combination of the methods outlined above. You could integrate a payment gateway into your website, while still accepting wire transfers for service-based projects. Virtual bank accounts are great for customers who prefer making a bank transfer, while payment gateways are better for customers who prefer paying by card.
As you weigh your options, compare fees carefully. These not only include conversion and transfer fees but can also include additional processing and set-up fees. These add up quickly and can take a bite out of your budget. You should also consider customer service, payment methods offered, and reliability.
GoCardless helps businesses collect recurring and one-off international payments directly from customer bank accounts. With transparent pricing at the real exchange rate, you’ll save a bundle in overseas processing fees. Our global payments solution blends bank debit transfers and payments intelligence for a smoother, smarter 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.