How to accept international payments: Options for your business

In today’s global marketplace, customers from around the world want the ability to buy products they see online. To capitalize on this opportunity, businesses need to be able to accept international payments seamlessly.

Yet, only 50% of companies accept payments from customers in their local currencies. Less than 50% offer local payment types or languages. And 15% of companies offer no localized payment options at all.¹

This means that accepting international payments can even help put you ahead of the competition. Let’s look at how to accept international payments as a business.

🔍 Table of Contents
How to accept international payments: Getting started How to accept international payments via different payment methods Ways to accept international payments with local account details What is the best way to receive payment from overseas? Receive international payments with ease - Discover Wise Business

How to accept international payments: Getting started

When planning how to accept international payments, there are a few things to consider. These steps will help to ensure that your international transactions go through smoothly.

Local payment methods

To get started, it’s important to research and understand the most popular payment methods customers use in your target markets. In some regions, credit and debit cards may be the default option. In others, digital wallets or bank transfers may be the preferred choice.

By integrating the most common local payment methods into your payment system, you can cater to the specific needs of your international markets. This can increase sales conversion rates and customer satisfaction.

Currencies to accept

Your market research should also reveal which currencies you’ll need to accept. For example, in some countries with weak currencies or large expat communities, customers may prefer not to use the national currency.

You’ll also need to consider the feasibility and costs associated with supporting multiple currencies.

Currency conversion

If you accept payments in multiple currencies, you'll need to convert the foreign currency into your company’s base currency. There are various ways to handle this. You could use a payment processor that offers currency conversion services, for example. Another option is using a foreign exchange provider.

Transaction costs

It's important to consider any additional costs associated with international transactions. These can include cross-border transaction fees, the exchange rates, and intermediary bank charges.

You can compare different payment service providers and financial institutions to find the most competitive rates. Keep in mind, however, that the cheapest option may not always be the best. Factors like reliability, security, and customer support are equally important.

How to accept international payments online

To accept international payments online through a website or e-commerce store, you’ll need a payment gateway. This is needed in order to process your customers’ details. You'll also need a merchant account to hold the funds. The merchant account will link to a business account to transfer the money once it is cleared.

💡 Which account you link to will make a big difference to the overall cost. An account with local details such as Wise Business can save you money by avoiding cross-border fees and bad exchange rates.

Choosing a payment gateway from a provider such as PayPal, Square or Stripe allows you to embed a checkout page in your website. This feature makes it possible to accept payments directly or redirect customers to the payment gateway’s website. This solves the dilemma of how to accept international credit card payments into your business account.

Pros	Cons
Easy to set up, so you can start accepting international payments immediately Funds are cleared within a few days Customizable checkout pages allow for consistency with your store design and branding Customers can save their payment details, speeding up future purchases	Payment processors charge monthly fees as well as other costs, including currency conversion Regulations hold businesses collecting customer payments responsible for data security

How to accept international wire transfers

Wire transfer services are accessible in many countries. This makes it convenient for customers to send payments for purchases. International wire transfers are typically processed through the SWIFT network. This standardizes messaging across financial institutions.

To receive wire payments, you need to provide your customers with wire instructions to make sure the money ends up in the right account.

This information will vary depending on your bank, but can include:

• Your business name and address,
• Bank name and address,
• Account number and account type,
• International Bank Account Number (IBAN),
• Bank’s BIC or SWIFT code,
• Payment amount, and;
• Payment reference.

International wire transfers can incur various fees. Fees for receiving money from abroad, exchange rate mark-ups, and intermediary bank charges can all add up. You should check whether your bank or a wire transfer provider will offer the most cost-effective rates.

International wire payments are not automated. If you’re looking to accept recurring international bank wire payments for subscribers, you’ll need to use a third-party service provider.

Pros	Cons
Wire transfer services are available for customers around the world International transfers are well-regulated, ensuring payments arrive safely	High transfer costs from poor exchange rates and intermediary banks adding processing fees Settlement of SWIFT network transfers can take time

How to accept a letter of credit for international payments

Letters of credit help companies do business with new customers in international markets. A letter of credit is a commitment from the overseas customer’s bank to ensure the exporter receives payment once they ship goods.²

The customer transfers the payment to their bank, which provides documentation to the seller’s bank as proof that the funds are available.

Letters of credit are used in trade finance to protect the seller and customer. The customer receives a payment guarantee, while the customer receives assurance that they will receive the goods.

A letter of credit is a secure payment option, but can be time-consuming to set up and incurs bank fees.

They tend to be used between businesses when there is a potential risk of non-payment. For example, when the customer does not have acceptable credit available, when establishing a new trade relationship, or when the customer requests extended payment terms.

Pros	Cons
Issuing bank ensures timely payment Non-payment risk is transferred to the bank Bank guarantee provides security for your business and customers	Time-consuming and expensive to set up Each transaction requires a separate letter Lengthy claims process if things go wrong Risk of fraud if the customer misuses the contract terms

How to accept an international money order

Although money orders have largely been replaced by electronic transfers, they are still used in some parts of the world. Particularly where customers may not have bank accounts.

Customers can buy international money orders from some banks, credit unions, post offices, and remittance providers. They buy the money order for the amount of currency you want to receive, ensuring that the balance isn’t reduced by exchange rate fluctuations.

You’ll need to provide an address for your customers to send the money order. You can cash the money order at a bank or a branch of the issuer, such as the United States Postal Service (USPS), MoneyGram, or Western Union. Don’t forget to sign the back of the money order and provide the name of the business and identification before cashing.

Pros	Cons
Easy for customers to buy and send Customers do not need to have or provide bank account details Money orders require sender and recipient signatures and can be reissued if they are lost or stolen Payments are guaranteed as money orders are prepaid and can’t bounce like checks	Slow to receive payment as they are sent via international mail and must be cashed physically Poor currency exchange rates and high fixed purchase and recipient fees Low limits on the amount of money customers can transfer Less regulated than other transfer methods so susceptible to fraud and scams

Ways to accept international payments with local account details

You might want the convenience of accepting payment via bank transfer. However, not all banks can process Automated Clearing House (ACH) transactions.³

If you're looking into how to accept international ACH payments, you can sign up for a service such as Wise, PayPal or Payoneer. These services often provide local account details. These details allow you to receive money from international customers as if you had a local bank account.

You can avoid wire transfer fees, while your customers can pay with the convenience of sending a local bank transfer.

Wise

Wise is a financial technology company that provides businesses with unique account details to receive money in more than nine local currencies. This eliminates the hidden fees and complexities that are often associated with international payments.

You can provide your customers with the convenience of paying in a currency they are familiar with. It's also possible to add your local account details to invoices, share them from the Wise mobile app, or request funds with a payment link. These features all make it easier for customers to pay you, which can help you get paid faster in return.

You can track payments, convert at the real mid-market rate, and hold over 40 currencies. You can also connect to platforms such as Xero, QuickBooks, Stripe and Shopify.

Find out more about Wise Business

PayPal

You can accept payments in foreign currencies through a PayPal Business account and convert the funds to US dollars automatically or manually.⁴ Or hold the balances in the account.

To convert payments automatically each time you make a sale, you can select the conversion option under your account payment preferences. Currencies are converted at the latest exchange rates and credited to your PayPal Business account in USD.

If you prefer to make the conversion manually, such as when exchange rates are more favorable, you should set the account to notify you each time you receive a payment.

To hold the payments in foreign currency, you’ll need to add the currency to your account. PayPal supports 25 foreign currency balances.⁵

Payoneer

Payoneer’s Global Payment Service provides local account details for nine countries. You can send the receiving account details to customers or use them in a marketplace.

Receiving payments in USD is free in the US as well as Japan, India, South Korea, Thailand, and the UK.⁶

Once you receive payment, you can transfer the money from your Payoneer account to your local business bank account in your preferred currency. The Global Payment Service is not a bank account, so you can’t charge your receiving account. However, you can make business payments directly from your Payoneer account.

What is the best way to receive payment from overseas?

The best way for your company to receive international payments will depend on your business needs, and types of customers. It may also depend on the most common payment methods in the countries you’ll receive transfers from.

If you want to accept payments primarily online, you’ll need a payment gateway and merchant account. If you’re looking to establish trade relationships with overseas companies, a letter of credit can help transactions go smoothly. And if you want the convenience of invoicing customers with local account details, a payment service can allocate you receiving accounts. This allows customers to pay as if you had a bank account in their country.

It’s important to consider the costs associated with the different international payment methods. You can save a lot of money in currency exchange and transaction fees by choosing the right option.

Receive international payments with ease - Discover Wise Business

If you’re looking at how to accept payments from international customers to expand your business, you’ll want the most convenient, cost-effective option for you and your customers.

A Wise Business account makes it easy to receive secure international payments from your customers via your payment gateway or local receiving accounts without the hidden fees and exchange markups that banks and other service providers often charge.

Discover Wise Business,
Easy to set up, easy to use

Wise is not a bank, but a smart online alternative, designed with international transactions in mind.

You can open a Wise Business account today and start receiving international payments in no time.

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Sources:

1. https://home.bluesnap.com/snap-center/blog/localize-payments
2. Letter of Credit
3. International ACH Transactions | Nacha
4. How to accept foreign currency with your PayPal Business account
5. PayPal Supported Currencies
6. Get paid in multiple currencies with local receiving accounts - Payoneer \

All sources checked May 23, 2023.