Each country has their own national payment system that allows payments to be processed in a matter of seconds. However, international transactions are a much more complicated and costly process. Many companies do business with partners or sell to customers overseas, so they regularly make and receive payments across borders.
Global payments, also named cross-border payments, are transactions where the payer and the receiver are based in different countries. Though it can also be between individuals, global payments are most commonly used by international companies that operate in different countries and need to pay to suppliers overseas or receive payments from customers in another country.
It is crucial for these companies that transactions are as fast and efficient as possible, as that is a key part of their business. In order to operate globally and make seamless international payments, companies need to work with payment service providers (PSP) that accept a wide range of payments. Choosing the right PSP enables companies to collect money more easily, predict their cash flow and know exactly what fees to expect (including currency exchange fees), as some banks and PSP charge higher fees than others.
It is important to offer a variety of payment types to customers, as they can have different preferences. Credit card payments are a popular option, as customers only have to insert their bank account details as they would do for a domestic payment. The behind-the-scenes is a lot more complex than it looks on the customer end, with both the credit card provider and acquiring bank having to work together to validate and process the transaction.
Global bank transfers are processed similarly: payers are asked to insert the bank account details of the receiver, which can be the IBAN (International Bank Account Number) and BIC number (Bank Identifier Code), or the IBAN alone. Countries like the United States do not accept IBAN, so you will need the receiver’s BIC number to make the international payment. The rest of the work is on the Payment Service Provider.
Global payments can also be done through eWallets (purchasing a product online from an international company, for example), though the payment can only be considered a cross-border payment once it reaches the merchant’s account.
On the customer side, making a global payment is quite simple- all customers have to do is insert the IBAN and BIC/SWIFT code of the receiver, so that the transaction can be routed to the right bank account. If the transaction is approved, they will receive the payment confirmation and the funds will be withdrawn from their account.
Though the funds are withdrawn immediately, they usually arrive in the receiver’s account in one to five working days. The waiting time can be affected by bank holidays and weekends (as these payments can only be processed on business days), the need to exchange currency, fraud prevention processes or mistakes in payment details.
From hidden fees to unpredictable waiting times, global payments can have multiple pain points depending on which PSP you partner with. It’s crucial to make sure that all fees are transparent and that the PSP you choose to work with is connected to as many acquiring banks as possible, in different parts of the world, as this facilitates the payment approval.
Global payments are extremely secure. PSPs that offer global payment services comply with the SCA (Strong Customer Authentication) regulation set by PSD2 through 3D secure authentication. This means that their process of verifying customers’ identities and checking the validity of their bank accounts requires new authentication methods, such as biometrics, which significantly reduces the risk of cyber fraud. Most PSPs are also PCI-compliant.
In today’s world, it is almost critical to accept international payments if your company wants to stay competitive. Restricting your business to a single location is also limiting your customer reach and opportunities to gain fraction in the market.
This is understandably a big decision to make that involves some financial investment and potentially higher costs due to exchange rates. However, it is also a necessary step not just to thrive but to survive in an industry that is packed with highly reputable companies that offer their services worldwide. Accepting international payments is part of the process if your business wants to expand.
Hosted international payments are payments processed via a different hosted payment page, and not directly via your company’s website. This means that when your customers proceed to check out, they will be taken to another page to complete the payment. These hosted pages work with any kind of payment- international or domestic.
If you partner with a PSP that has strong payment security and is PCI compliant, this hosted page should safely capture and store your customers’ data. The hosted payments page feature helps you provide your customers a seamless payments experience whilst ensuring that their data is protected.
A payment gateway is a tool that transmits the payment data from the Issuing bank to the payment processor. When you purchase something, your details will be transmitted to the payment processor via a payment gateway. The payment gateway is also responsible for communicating to you if the transaction was authorised. Most often, companies offer gateway and processing services all in one.
An international payment gateway is a gateway that offers multi-currency payments and has its services translated to multiple languages, making it easier for businesses to take international payments.
There is a long list of trustable PSPs and payment gateways that offer global payment solutions. Some of the most popular ones include:
Its gateway service is available in over 200 countries and regions and supports 25 currencies. PayPal is know to be a cheap, efficient and easy way to transfer money international. It counts with more than 220 million users, making it the most used payments platform worldwide.
Stripe differs from other international payment gateways because it provides a range of APIs which allow companies to customise their services. It also covers over 100 currencies across the globe and offers a wide variety of payment types and support features.
Adyen covers 150 currencies and accepts a wide range of payment methods. It is used by renowned corporations such as Microsoft, Spotify and eBay (who previously used PayPal as their main payment gateway).
Authorize.net is a subsidiary of Visa Inc. and offers a customisable platform to take international payments online or in-person. The biggest downside of Authorise.net is that you can only use its services if your business is based in the US, the UK, Canada, Europe or Australia.
Other popular international payment gateways include FIS Global (previously WorldPay), Braintree (owned by PayPal), 2Checkout, Opayo, Checkout.com, Amazon Pay and Sage Pay.
All international payment gateways offer similar services when it comes to the currencies, languages and countries they cover. It is useful to consider what your company’s future plans are, as well as the amount of support and features you would require, so that you can find the payment gateway that best suits your company’s needs.
Imburse offers connectivity to the global payments ecosystem so you can make payments and collect money from your customers no matter where they are in the world. Making global payments is a key part of many international businesses, so it should be a simple, fast and cost-efficient process.
By connecting to Imburse, you can instantly connect with any international payment gateway and payment provider you want, gaining the freedom to expand to new markets at no additional cost. Do reach out to us here if you are interested in what Imburse can do for your business- our expert team is always happy to help you.
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