Paying suppliers in foreign currencies can be expensive and confusing. As new players enter the payments market, there has never been a better time to re-evaluate your payment flow.
By choosing the right international payment methods, SMBs can avoid expensive transaction fees and poor FX rates, as well as improve company cash flow.
Here’s where Airwallex can help. With our fast and transparent pricing, you can save time, improve company cash flow and keep costs down.
Let’s take a look at the current traditional payment methods, and how Airwallex stacks up against them.
International Bank Transfer
A common and easy method to pay international suppliers is through direct bank transfer. All you need is the recipient’s bank account details and BIC/SWIFT code, plus a bank account structure that allows you to make payments via the SWIFT network to get started.
However, SWIFT payments and international bank transfers are typically slow, taking up to five business days or longer to be received. These delays can often have a negative effect on business cash flow, as money in transit is neither earning interest nor being used to settle accounts.
International bank transfers also face high transaction fees, ranging from A$6 up to A$30 or more per transaction. This is usually on top of the fees that are ‘baked in’ to the FX rates normally provided by Australian banks, which fall within 4-5% off the interbank FX rate (the rate found on Google).
While it may seem convenient to pay overseas suppliers via international bank transfer, it may not always be the best option. If you’re after a cheap, secure and reliable way to send money internationally, there are better methods to make sure your money is sent fast and in full.
PayPal or Credit Card
Using your business credit card or PayPal account is a relatively simple method that works well when making smaller payments. It can be useful to help manage cash flow by taking advantage of credit card’s interest-free period as you wait for funds from sales to arrive before making payment.
The downside to making payments via credit cards are the double-fees they usually come with; a foreign transaction fee of around 3% depending on the provider, as well as being at the mercy of the card provider’s FX rates, which are normally 3-4% off the mark. Adding these together, payments can cost anywhere from 3%-8% of the total transaction.
On the contrary, PayPal charges both a percentage fee and a flat dollar fee per payment, which grows with the amount of payment that needs to be sent. Weighing up the total costs of these fees is crucial for evaluating the efficiency of the payment method.
Airwallex is a cost-effective, fast and secure way to pay overseas suppliers in 20+ currencies and over 130 countries. The system uses a lightning-fast payment system which means you can pay international suppliers practically instantaneously. No waiting around for money to clear, no delays. which
You get access to Airwallex’s interbank FX rate with a very small and margin on top, between 0.3% and 0.6%. Best of all, the margin is the same regardless of the amount you are paying – so there is no need to call up to negotiate the best rates.
Airwallex also offers card payment options which come with zero international transaction fees. If you need to make a card payment, you can instantly create a new virtual Visa-linked card to pay a supplier online, using Airwallex’s interbank FX rates.
We have also recently integrated with Xero, allowing you to connect your multi-currency financial transactions in Airwallex to Xero. You will be able to view a daily update of their transactions through your Xero bank feeds, simplifying and speeding up the reconciliation process.
With zero sign-up fees and zero monthly transaction fees, this is a great method to improve your cashflow and bring costs down.
If you run into any issues, our customer support team based in Melbourne is always a quick call away.
Airwallex is a global fintech leader that was founded in Melbourne, Australia with a simple goal – to modernise the business account in a borderless world. Our core strength lies in our proprietary tech-driven infrastructure to enable low-cost, high-speed and transparent international collections and payments. Airwallex reached unicorn status (US$1B valuation) last year and is the fastest Australian start up to do so.
We are regularly adding new products and features to help businesses save time and money so they can focus on the growth of their business. Check out our product roadmap here
Speak to us at SBC Summit & Expo Expo 2020:
If you would like to find out more about how Airwallex can help manage your international transactions and improve your cash flow, speak to our product specialists at www.airwallex.com or visit our booth at the upcoming SBC Expo.