Paying suppliers overseas from Australia

Whether you have your own business already, or are looking to start one, there might be a time where you may need to seek out overseas suppliers to fulfil your business needs or services.

In fact, in the 2020 to 2021 financial year, the number of Australian business importers increased by 23% from the previous year, making the value for overseas imports around $309 billion dollars.¹ Here’s what you need to know for how to make payments to suppliers overseas from Australia.

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Ways to pay suppliers abroad from Australia

To pay an Australian supplier, the ease is in the familiarity. From handing over cash, to making a bank transfer using Bpay, PayID or their Australian BSB and account number, these methods are all too common to Australian consumers.

When it comes to paying suppliers overseas, you’ll likely be faced with an invoice or call for payment with unfamiliar bank codes, instructions and different currencies.

It doesn’t have to be a challenge though, even when it is the first time you are going to pay your overseas supplier. Here are some ways to pay suppliers abroad from your Australian business.

• Wise Business Account
• Bank to bank transfer
• Credit card
• PayPal
• International money transfer providers

We’ll dig a little deeper into each option, and the key things you need to know about them.

Paying suppliers abroad with Wise Business

Dealing with multiple foreign currencies can be a hassle, especially if you are being charged extra fees on top of your order. The Wise Business account comes with several features that can help alleviate some of the common stressors that come with paying overseas suppliers. With the one account, you’ll get account details including:

• Australian Dollar (AUD)
• Canadian Dollar (CAD)
• European Euro (EUR)
• Great British Pound (GBP)
• Hungarian Forint (HUF)
• New Zealand Dollar (NZD)
• Romanian Leu (RON)
• Singapore Dollar SGD
• Turkish Lira (TRY)
• United States Dollar (USD)

This means you’ll be able to send and receive all supplier payments as if you were doing business locally in each of these countries. Outside of these accounts, you’ll access the real exchange rate when sending money to 160+ countries, with only a transparent fee that you’ll know up-front when setting up each transfer.

Paying by other methods listed here below

Outside of the Wise Business Account, here are five more ways you can pay overseas suppliers.

Credit card

Using a credit card to pay an overseas supplier is possible and many businesses do utilise this method for smaller payments, especially bills payable online. Depending on your credit card provider, there may be fees incurred including international transaction fees, currency exchange conversion fees or margins and interest for late payments. This can get costly on large payments or frequent orders.

Bank to Bank transfer

One of the most common methods to pay suppliers overseas is by using bank to bank transfers. Generally, if you have a business account with any of the big 4 banks like NAB² , Commonwealth Bank³, ANZ⁴ or Westpac⁵, you’ll be able to use their international money transfer (IMT) facility. You should watch out for extra fees that are incorporated into bank to bank transfers including intermediary bank fees from using the SWIFT network³, foreign transaction fees or margins included in their own foreign exchange rate.

PayPal

PayPal is a well-known multinational company that allows people to send and receive money through their service. PayPal may be a preferred method for your overseas supplier as PayPal is in many parts of the world. Depending on where your supplier is and what currency you need to pay for your goods can incur different fees on the PayPal platform.⁶

International Money Transfer Providers

Outside of the big banks and PayPal, you’ll also find other international money providers that specialise in moving money overseas for businesses. Some companies include:

• Western Union
• OFX
• Airwallex
• WorldRemit
• XE

Depending on which company you choose can vary the fees, currencies available and countries where you easily pay suppliers outside Australia.

Important things to keep in mind when paying suppliers abroad

Before you lock in your money transfer to an overseas supplier, there are a few important things to keep in mind.

1. Check that what you are importing can be imported into Australia

Importing goods into Australia requires a bit of research and preparation, especially for businesses seeking out a new supplier abroad.
There are goods that don’t require a formal import declaration including ⁷:

• Low in value
• Personal effects
• Software downloads

This changes if you are looking at more complex imports that ⁷:

• Are over $1000 AUD in value
• Prohibited or restricted
• Could pose a biosecurity risk
• Require duty taxes to be paid

It's important to check what your requirements to the Australian government are before paying any supplier abroad for an order. Delays or issues with releasing your items at the border can impact how your business runs.

2. Verify the reliability of your chosen supplier

Knowing who and where you are sending your money to is crucial when dealing with overseas suppliers. You can do this by checking for the company registration through a local registry, using verified databases that list suppliers, research online reviews and if possible, and request any certifications for goods before they are ordered.

3. Develop a well-defined supply agreement with clear terms

You may think that there aren't any protections when dealing with overseas suppliers. Although protections vary across countries, keeping everything above board with clear cut supply agreements can put rules in place that can support any issues endured down the track.

When setting up a supply agreement, terms between your business and the supplier should be clear and include items like clear descriptions of items, clear guidelines on payment methods, pricing terms, shipping or delivery speed, warranties and any liability notices.

4. Understand the fees involved

As mentioned above, many payment methods can come with extra fees including margins on exchange rates, foreign transaction fees and general processing fees. To save yourself from paying more for your incoming goods, choosing a reputable provider that is upfront with their fees can help save your business heaps in the long run.

Depending on what you import, you may also incur fees associated with bringing those goods in. Fees are from any logistics, storage, custom duties, clearance permits, or other import related fees that are based on your order.⁷

5. Understand your tax obligations

That leads us into the last key thing to keep in mind. Just because goods are imported from abroad does not mean they are exempt from goods and service taxes (GST) here in Australia. According to Australian tax law, It is up to the Australian business owner to determine whether the goods they are importing for commercial purposes is subject to GST. Doing your own research or seeing professional guidance for your obligations can help clear up any confusion before you send your money abroad.⁸

Staying safe when sending payments abroad

When money is involved, new and improved scams are just around the corner. You can keep you and your business safe by:

• Verify each and every supplier you contact
• Only communicate with suppliers through secure channels
• Use multi-factor authentication (MFA) on accounts
• Never share sensitive information like passwords with anyone
• Research the latest trends for scams
• Be cautious of unsolicited emails or payment demands
• Double check the payment details of your supplier
• Update your computer software regularly
• Use a reputable payment provider to send money overseas
• Don’t jump into deals that seem too good to be true

Even when you have built a solid relationship with a supplier, scams and opportunistic criminals are always on the lookout for ways to infiltrate high worth money movements. Using your own due diligence to stay a step ahead can make sure all your supplier payments go through without a hitch.

Wise Business Account and Debit Card

Streamlined and hassle-free, the Wise Business Account with linked debit card delivers an all-in-one solution for businesses.

At home or abroad, you can shop online or in-store via the Mastercard network and make easy ATM withdrawals using the Wise business debit card. With no monthly fees, hefty rates or hidden charges, Wise makes it easier to spend, send and receive funds.

Manage your money via your local Australian account while also benefiting from access to accounts in over 9 major currencies.

Access additional cards for your team as needed and pay a single fixed card-creation fee per card with no monthly fees applied.

Able to integrate with most major APIs, the Wise Business Account also facilitates better cash flow management and consistent, reliable reporting across all additional cards.

Find out more about how the Wise Business Account can save you time and money.

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Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information.

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