The ultimate guide to paying overseas suppliers

In today’s hyperconnected world, it’s easy to find, secure, and trade with international merchants and suppliers. Business is instant, and Google Translate can facilitate your communication; the only things slowing you down are different time zones, and how you go about paying your international suppliers.

One thing that will never change is that businesses of all sizes want a quick, reliable, cost-effective and secure method to make overseas payments. One delayed payment, or a couple of unexpected fees, and your relationship with a supplier can get derailed.

Choosing the right international payment method can make all the difference in streamlining your international business relationships, so it’s crucial that you understand what’s involved with each one. We’ll walk you through a few methods, and how exactly each one works, so you can fully grasp the pros and cons of each method.

Bank transfer

One simple way to pay overseas suppliers is via bank transfer. All you need to know is their bank details, the transaction itself is run through the SWIFT network.

However, international bank transfers require a great deal of your time. There is very little protection for merchants or suppliers, and no possible course of action from your bank in the chance your transaction goes wrong. On top of limited security, international bank transfers are typically slow, taking up to five business days or longer to be completed. 

You also face high fees on your transaction, ranging from $6 up to $30 or more. That’s per transaction. In some cases, you’re even charged fees to amend, cancel, or investigate any issues with your transfer. This is on top of the FX rate banks give, which can be 4-5% less the interbank FX rate (the rate you typically find on Google). So if you’re after a cheap, secure way to send money internationally, a bank transfer through one of the big banks may not be the best way to pay overseas suppliers. A better alternative to bank transfers would be through FinTech companies that offer similar services.

Credit Card

The process of using a credit card to pay is easy and instant, you’d just need to key in your credit card information and the payment will be processed. 

However, while your credit card can be a suitable method for instant payment, you will be charged a high foreign transaction fee (typically 3%) on each payment. This can rack up a significant amount in the long run.

PayPal

Using PayPal to pay overseas suppliers is a reasonably simple, straightforward method that works adequately for smaller payments. The benefits of PayPal include a good dispute resolution process, secure technology, and protection against fraud. However, PayPal charges both a percentage fee and a flat dollar fee per payment, which scales up based on the amount of money you’re sending. 

Also, when paying via PayPal you run the risk of account holds, declined payments (based on their perceived level of risk), laborious payment times, and the risk that your transaction may even be cancelled.

Peer-to-peer currency transfers

Peer-to-peer transfers are picking up speed as personalpayment platforms, but how do they measure up when paying overseas suppliers?

The benefit of these types of platforms is that they provide quick payments, and charge less fees than the banks. But while they may be quicker than other methods, peer-to-peer transfers generally aren’t the safest way to pay overseas suppliers. These platforms don’t have security in place to protect their users, and their exchange rates typically aren’t as competitive as other methods.

Airwallex

If you are making international payments and want a cost-effective, fast and secure way to send money, why not consider Airwallex? Airwallex is a FinTech company founded in 2015 in Melbourne offering payment services through a digital platform. 

Some of the advantages of using Airwallex are:

• Our lightning-fast payment system means you can pay international suppliers practically instantaneously. No waiting around for money to clear, no delays. 

• We offer you access to the interbank FX rate with a very small and transparent margin on top. This means we are up to 90% cheaper than the big banks. Best of all, the margin is the same regardless of the amount you are paying - so no need to call up to negotiate the best rates.

• We also offer card payment options with zero international transaction fees. If you need to make a card payment, instantly spin up a virtual card to pay a supplier online. You can also opt for physical cards, Apple Pay and Google Pay to make payments. 

• Lastly, we have no monthly fees and our business account can be set up all online.

With access to over 150 countries in 40+ currencies, Airwallex is the safest and most cost-effective way to pay your overseas suppliers, too. We are PCI-compliant so your data and funds remain protected at every step of your transfer and our security systems maintain the highest international standards.

How to pay overseas suppliers with Airwallex

For complete certainty, absolute speed, and the best exchange rates around, Airwallex is the safest way to pay your overseas suppliers.

It’s easy to set up, and easy to get started, and you gain direct access to our expert support team to help you get the most out of your new payment system.

Airwallex’s Transfer allows you to transfer money to international bank accounts in just a few steps: 

• Create an Airwallex account for free and verify your business, with no branch visits needed

• Transfer money into your Airwallex wallet to fund your transfer

• Enter your recipient’s banking details and create them as a Contact

• Check the real-time FX rate and fees to know precisely how much money it will cost

• Confirm your transfer and track its progress on your desktop or mobile, and you’re ready to transfer money anywhere, anytime.

Airwallex’s Borderless Card, Singapore’s first multi-currency corporate card with unlimited 1% cashback* and zero international transaction fees mean that you can not just create multiple cards online, you can also empower your employees by letting them spend on necessities while you control the budget.

Get in touch with us to experience first-hand how Airwallex can streamline your international payments.

*T&Cs apply.