The global business landscape is gradually shifting from advanced economies to emerging markets. As per McKinsey, it is estimated that by 2030 developing countries will account for more than half of the global consumption market.
This shift in globalization should be backed by financial stability and economic growth. Facilitating ease of payments and invoicing can enhance the global business strategy and contribute towards effective reach. The overall whole idea is that businesses operating in global markets should be able to seamlessly accept international payments.
There are five easy and effective ways to receive these payments, which makes global market expansion easier. This article will explore the depths of these payments while observing the pros and cons.
Top 5 Preferred International Payment Methods
These international payment methods have been used for a while. You will learn about the security, fees, speed, and other considerations for each payment method.
PayPal is synonymous with international payments. As many people who have penetrated the global markets use PayPal, it is the most preferred payment method. Moreover, it is popular owing to its user-friendly interface.
The best part about PayPal is that it is a multi-currency payment solution. It can easily accept payments from international currencies and convert them into your country’s currency.
The Key Features
It is widely accepted and used by most international businesses. As a result, you will find it a convenient choice for sending and receiving payments.
It transacts in multiple currencies and easily converts the money sent/received into your preferred currency.
The payment platform protects your buyer/seller information by offering extensive security layers. As a result, you are less likely to face fraud while operating on this platform.
Pros of PayPal
Whether you are technically proficient or not, the intuitive interface will make PayPal easy to use
Clients can choose to pay you using diverse platforms. This makes the platform flexible and adaptable.
You can process the payments quickly. Moreover, the speed of transfer is higher with PayPal.
Cons of PayPal
When using PayPal for cross-border transactions, you may need to pay a higher fee. This can impact the cost for users
The exchange rates offered by PayPal are not great with PayPal. This can cost you more
#2 Bank Wire Transfers
This traditional method is also very reliable in the international market. In this case, the funds are directly transferred from your client’s account to yours. There are no mediators or risks involved in completing the transfer.
It is a secure channel if you are planning to transfer huge funds. As they have been conventionally part of the global business network, it has become a preferred payment mode.
The Key Features
The bank wire transfers are highly secure. As a result, you can use them for high-value international payments. This will ensure your payments are completed on time without any risks.
There are no intermediaries involved in this payment method. The funds are transferred from your account to the client’s and vice versa.
Pros of Bank Wire Transfers
It is a traditionally accepted payment method. Moreover, it is reliable and security-proof.
You can use it for high-value trades, where security is pivotal.
Cons of Bank Wire Transfers
The fees are higher in this case when compared to the other international payment methods.
The transaction speed is relatively lower. Your transactions will take a longer while to process and complete.
Wise (earlier known as TransferWise) was the pioneer of the peer-to-peer international payment model. It redefined the payment landscape with minimal fees and transparent exchange rates. Additionally, it offered a low conversion rate to the users.
As a result, you could easily accept payments in multiple currencies without bearing the overheads.
The Key Features
The most significant feature of this payment method was the transparency in fees and exchange rates. It allows you to know the charges you will experience when receiving money via this platform. It offered a competitive rate, making it a brilliant payment platform.
You can hold your money in multiple currencies. This increased the efficiency of cross-border payments.
The speed of processing is higher with wisdom. As a result, your funds will show in your account as soon as they are transferred. This allows ease of access.
Pros of Wise
It is a cost-effective platform as the conversion rates are relatively low.
You can easily send/receive funds owing to the simplified and usable interface.
The platform offers competitive exchange rates. This means you may not find it expensive to transact in fluctuating currencies.
Cons of Wise
It doesn’t support all international currencies, thus limiting your transactions to specific regions.
You may experience limits on withdrawals from Wise. This means you cannot withdraw a large sum instantly.
#4 Cryptocurrency Payments
This unconventional and recently introduced payment method has gained sufficient footing in the international markets. It contributes towards decentralized and borderless transactions that expedite payments.
It is a secure, reliable, and fast method for cross-border transactions. You can easily use digital wallets with a defined address to receive the payments. Bitcoin and Ethereum are examples of this payment method.
The Key Features
The cryptocurrency payment method works with decentralized networks. As a result, they don’t depend on your traditional banking method.
As the transactions on Blockchain are transparent and secure, you can reduce the risks and fraud. It can also reduce manipulations.
It is the best fit for all cross-border transactions as it operates with a digital wallet and address.
Pros of Cryptocurrency Payments
You can access the funds instantly as the transactions are quick and reliable.
The operating fees for these transactions are relatively less when compared with the traditional methods.
It enables borderless payments, which eliminates geographical restrictions.
Cons of Cryptocurrency Payments
As cryptocurrencies are volatile, you may face stability risks when transacting using this method.
It is not yet universal. You may find clients hesitant to embrace this payment method, which can become an issue.
#5 Payment Service Providers
Stripe and Square are popular payment service providers. There are other upcoming solutions as well that you can use to complete payments.
These platforms extend subscription billing solutions, global payments and payment processing services. As they adhere to international payment standards, you will find it easier to integrate them with your eCommerce websites.
The Key Features
It is easier to integrate these payment services with your website or application.
You can easily integrate multiple payment methods, such as credit cards and digital wallets, with PSP.
It facilitates international transactions. This means you can reach a larger customer base.
Pros of Payment Service Providers
It streamlines the entire payment system, which makes it convenient and easy for you
You can implement security protocols that protect your business and the client’s information.
It offers several services, including analytics, that drive value for your business.
Cons of Payment Service Providers
The platform fees are higher. This can add to your cost, especially when transacting with higher-value
They can impose holds and restrictions on your account. This can impact your fund accessibility.
You can choose one of these five methods to encourage international transactions for your business. Evaluate these methods using speed, security, fees and convenience factors.
This article has explored the key features, pros and cons Of these five payment methods. Depending on your overhead limits, accessibility needs and reach requirements, you can use one of these five.
Choose the one that fits all your clients and offers great convenience. This would improve your global business visibility and ease your transactions.