When sending your money abroad, do you know where it goes? We have come a long way on from sailing pots of gold across the high seas, and the modern process can often seem to be a bit of a mystery, involving complex, time-consuming and expensive procedures. It can feel like your money has arrived on the other side with someone along the way taking a hefty cut.
Our series on International Payments For Dummies is here to help you understand the process of overseas payments, so you know how your money gets from A to B and where you can avoid those pesky hidden fees.
Part 1: Asking the right questions when paying an international invoice
Let’s face it, it’s been quite a number of years since the term ‘global village’ was coined, but the reality is that Australian businesses no longer rely on local providers for their business needs. Regardless of industry, businesses are increasingly counting on international suppliers to keep their own operations competitive.
With international suppliers comes international payments, which can be complex due to fluctuating exchange rates and a number of international payment provider options, each with different ways of accommodating those payments.
There are a few points to consider when choosing an international payment provider and some of these are not as obvious as you’d expect.
The first, naturally, is cost. Many currency exchange and international payment companies will claim no commission on their services. The question here is: how can a business stay in business if it has no way of being paid? The way these organisations make money is they simply build their fee into the exchange rate that they offer you, rather than adding it on top. This means you don’t know how much their fee is, or how much the FX rate is. If you don’t know the real exchange rate, there is no way you can make an informed decision about which is better. When you’re trying to make an international payment, you want to be able to see the whole cost and that includes provider fees.
Secondly, how convenient is the process? Being able to do your invoice payment online is going to be a major time saver. Be sure to weigh up convenience against cost as some providers will charge you heavily for having fast and easy-to-use platforms. If you’re making multiple payments then the convenience of this method may be more important for you.
Thirdly, how long will the payment take? Time consideration is a huge factor in international payments, and you should not only assess time frames for the exchange process, but also how long the money will take to be in your payee’s account. The settlement period can be up to as long as 5 days depending on the provider, so it is important to know exactly how many days a payment will take if this is important for your supplier. As with the convenience factor, there may be associated costs with increased payment speed.
Lastly, how secure is the payment? If you’re sending money overseas, you need to be able to trust that it will arrive at its destination, as you intend, on time. Make sure that your online payment provider has the relevant website security, including industry standard SSL encryption.
Airwallex prides itself on being fully transparent, meaning unlike other payment providers we don’t hide our transaction fees. We’ll show you the real-time exchange rate, meaning you can make a judgement on the cost of our service with complete confidence. Airwallex has a simple-to-use, fully-secure online invoicing/payment system which allows you to create and pay invoices seamlessly, making the whole process easier for everyone. And just like the big banks, Airwallex is fully compliant and holds an up to date AFSL (Australian Financial Services License).
We’re in the business of making international payments cheaper, faster, better. Or in other words, simplified.