With the vast reach of the internet, we now have a global economy that gets larger in scope daily. Online, it is possible to do many things, such as run a company from half-way around the world. Purchasing goods and services is much easier as there are e-commerce stores that have online credit card payment and other similar options.
As transactions and deals are made, it is a must to have secure payment systems. Many of these are cross-border, spanning miles across the oceans. There are factors that make each payment transaction different, and these considerations also must be kept in mind when sending the same amount of money to the same recipient frequently.
Know the options
As we all know, sometimes transactions go haywire. There are payments that take a long time to be sent and ever longer to arrive. There are fees that are shouldered by either the sender or the recipient. As with every financial decision, each movement must be studied. Taking the time to know what the options are and the costs can save you a lot of money, time, and effort.
Make a studied decision
For cross-border payments, there are at least three factors that must be studied. These factors make the difference in the total amount that you need to shell out. Here are the factors that you need to know:
1. Transaction fees and miscellaneous fees to be incurred. As with nearly all cross-border payments, telegraphic transfers, and other similar transactions, there are fees to be paid. When sending telegraphic transfers through the banking institutions using the Society for WorldWide Interbank Financial Telecommunication (SWIFT) network, there will be an upfront fee for each transaction.
Note that if the funds are being moved by the banks through a network of intermediaries, there might be miscellaneous fees. These fees are added on because of the intermediary financial institutions that require a fee for moving the funds, hence, one can expect a certain amount that needs to be paid because of the compounded fees. But, there are some companies that have lower transaction fees, and it is best to explore these options.
2. Speed of transfer. Cross-border payments in some instances, such as those through banking institutions, may take up to three to five days for the recipient to get the funds. The number of working days it takes might be detrimental to the transaction, especially if there are invoice deadlines. There are weekends and holidays will delay the time it takes for the transfer to be completed. However, there is a wire transfer service that does the task in a timely manner, facilitating the sending of funds, with the ease of use of mobile apps.
3. Be aware of the currency exchange rates. Each financial institution’s currency exchange is dependent on their rates. When transferring money using a bank to an overseas account, the amount might decrease because of their exchange rates. There are also costs when one changes the amount from their currency to the one that of the recipient. Banking institutions typically offer lower exchange rates than most other money exchangers do. Find a company that offers a fair exchange rate that can provide you with advanced payment solutions.