International business payments: your complete guide

International business payments refer to any sum of money being sent abroad by a company or individual for business purposes. There are various methods of making an international payment, with the best option for you depending on your desired timeframe, the destination country, and the amount of money being transferred.

Today, making an international payment has never been easier with the sheer amount of banks and online exchange companies like CurrencyTransfer striving to make the process of doing so quick, accessible, and seamless.

We’ve broken down the process of making a business payment to a foreign country including the types of transactions, the fees involved, and the platforms out there for businesses and entrepreneurs to utilise.

International business payments

How to make an international business payment

Rather than going through your usual bank to send money abroad, businesses should benefit from dedicated online currency platforms. This way, you have access to lower exchange rates than your traditional bank can offer and most of the time you won’t even be charged any transaction and exchange fees.

Types of international business transactions:

Spot transfers

For fast international payments, you can opt for spot transfers, otherwise known as wire transfers. These involve the direct transfer of funds between two bank accounts in separate countries. The money is sent electronically and is based on an agreed exchange rate when you book the deal.

Forward contracts

Forward contracts allow you to ‘lock in’ a currency rate for a future transaction. They protect you from any fluctuations in rates and allow you to book in payment for a future agreed date (usually up to 12 months). This is known as ‘currency hedging’ and these types of transactions are recommended for instances such as buying or selling assets.

Market orders

Market orders involve setting up future international business transactions based on certain targets in currency rates. With limit orders, you can set up targets at which point your transactions will be executed to avoid you having to monitor exchange rates constantly and ensure you don’t miss out. On the other hand, you can set up stop-loss orders to prevent any transactions from being made while an exchange rate has risen above your limit to prevent losses.

What do you need to make an international payment?

To make a payment to an international client, you may need:

  • Payee’s account name
  • Payee’s IBAN or account number
  • Payee’s bank SWIFT/BIC, domestic routing code, or bank address

Despite this, requirements are dependent on the country you are making a payment to, so it’s important to be aware of these and ensure you’re compliant before attempting to make any payments.

How long does an international business payment take?

Various factors affect the overall timespan involved in sending money to a foreign bank account, including:

  • Destination country
  • Date and day of the week
  • Time of the day
  • Transaction method (as listed above)
  • Degree of verification checks in place

It’s important to be aware of approximately how long your payment will take in advance of an invoice due date. Your money can take minutes and arrive in your recipient’s bank account on the same day, or it can take up to a week, depending on the factors above.

You should also be aware of any public holidays in both your country and the destination country that could impact this timeframe to provide your recipients with an accurate estimate and ensure your invoices are paid on time.

Cost of international business payments

How much does it cost to make an international business payment?

Many small businesses experience severe overcharging and high fees when sending payments abroad, something that online foreign marketplaces are striving to change. Traditional banks charge variable transfer fees and profit from high exchange rates, meaning if you’re not educated on exchange rates and fluctuations in the market, you can end up suffering significant losses when making regular payments abroad.

Often, it is difficult to know how much you’ll be paying in fees until the payment has already been made, so failing to educate yourself on exchange rates can be detrimental to your profits.

If your business is trading abroad, for example, when using foreign suppliers where you need to make regular international payments, there are several key factors to consider when it comes to the fees involved:

  • Work with a trusted and reputable foreign exchange provider. If your business makes international payments regularly, it’s best to work with experts in the exchange market to benefit from lower rates and fees.
  • Be aware of the exchange market. The currency exchange market remains in constant fluctuation, so businesses must keep on top of this before making payments internationally to avoid losing out.
  • Check differing country requirements. Some countries charge additional fees on the acceptance of payments.
  • Avoid sending multiple or smaller payments to the same recipient. Sending multiple, smaller payments to the same recipient will cost you far more overall than consolidating these into one larger sum of money. Currency exchange rates are lower the more money you send, so where possible, avoid sending small sums of money abroad altogether.

What can you use to make and accept international payments?

Although it may seem easier to use your usual bank to send money, using a dedicated exchange service can help businesses save huge sums of money on every transaction and consistently benefit from low exchange rates.

CurrencyTransfer’s online currency exchange aims to help businesses of all sizes manage their international payments, stay on top of currency fluctuations and generally optimise when and how they are making payments to foreign countries.

Our platform is designed by currency experts with businesses trading abroad at the forefront of every feature; you can set up alerts or market orders to ensure your business doesn’t miss out on low rates or suffer from sudden increases in rates.

Why use CurrencyTransfer?

One of the main characteristics to look for in an international payment system is security. All our payment providers are regulated by the Financial Conduct Authority (FCA), safeguarding all our customers and your funds while they are being processed and received. You also receive access to a dedicated Relationship Manager should you have any queries or need an update on the status of your funds.

CurrencyTransfer is a global exchange marketplace providing businesses with an array of international payment options and the choice of the best payment provider, contract, and rate for them. This is all provided in one user-friendly interface. Check out our Help & FAQs or contact us for more information or with any queries.

Florence Couëdel