Best State To Form An LLC: Comprehensive Comparison and Guide (2024)
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According to McKinsey, global payment revenues grew 11% in 2022, a double-digit rate for the second year in a row, highlighting the volume of international payments made electronically.1 If you’re ready to step up your international commerce, here's a list of the most common payment types.
In this article, you'll also learn about how Wise Business has become a popular choice for global businesses looking for a reliable, cost-effective, and easy to integrate payment option.
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From the most traditional methods to cutting-edge digital solutions, this list will give you an overview of the methods available for global transactions. Read on to discover which could best suit your international commerce needs.
Wise Business is an international payment service provider that helps businesses with their cross-border financial needs. Wise has effectively revolutionized multinational payments with its transparent, low-cost, and efficient services.
With a focus on straightforward and honest multi-currency transactions, it’s become a go-to option for businesses of all sizes looking to make international payments.
See how much you'll pay with Wise Business:
Wise Business operates on a transparent, pay-as-you-go system where you’ll see exactly what you’re paying for each transfer. Getting local account details for multiple currencies costs a one-time fee of 31 USD, and sending and converting money depends on the currency but starts at 0.43% per transfer.2
One of the oldest and most historically reliable global payment systems is wire transfers. While they may sound relatively modern, they were established during the telegraph era in the mid-1800s. After many developments since then, wire transfers have become a tried-and-true method of transferring money electronically. How does it work? Using the SWIFT or Fedwire networks, money is moved from one financial institution to another.
Pros
Cons
Generally, domestic wire transfers are cheaper than international wire transfers. On average, incoming domestic and international transfers cost 15 USD each, outgoing domestic transfers cost 30 USD each, and outgoing international transfers cost 45 USD each.3
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ACH payments work similarly to wire transfers in that they transfer money between two financial institutions. However, ACH transfers are managed by the Automated Clearing House (ACH) network, which is only available in the US. As world payment systems have evolved, so has the ACH network. In response, Nacha (the company that runs ACH) has developed international ACH transactions.4
Pros
Cons
International ACH transfers typically cost less than $5.5
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Direct debit and bank transfers are the most common payment methods of transferring money from one account to another. They’re a smart way of bypassing the complications and costs of other, more traditional payment options.
Direct debit involves the payer allowing the payee to collect payments from their account on specific dates, often used for recurring payments like subscriptions. Bank transfers, on the other hand, involve a direct transaction between two accounts, which may be limited for international transfers.
Pros
Cons
Direct debit and bank transfers usually come with fees of 1% - 3% of the total amount.6
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Paper checks are one of the original ways of transferring money from one person to another. Checks can be delivered in the mail and serve as a contract to pay a specified amount from the sender’s bank account to the recipient. Despite being a slightly outdated method of payment in the digital world, paper checks have their own pros and cons as a global payment source.
Pros
Cons
For the sender, there are costs to purchase a checkbook and the envelope and stamp to send the check in. For the receiver, foreign check processing fees vary but are typically two to three-digit amounts. For example, BCU charges $20 per foreign check.7
The trusty credit card has been a mainstay as a cross-border payment type for decades. As many major credit cards are accepted globally, it removes the barriers that many other payment methods have.
Pros
Cons
Fees for credit card transactions depend on the card network you’re using, whether American Express, Visa, Mastercard, Discover, or something else. The average transaction costs for these top four networks are 1.29% to 3.3%.8 On top of this, there are also the payment processor fees to consider and potential card issuer fees.
Prepaid debit cards are a popular international payment method for businesses around the world. It lets people access their goods and services without the need for cash or even a bank account, making cross-border commerce a lot more accessible.
Pros
Cons
On average, prepaid debit cards charge monthly maintenance fees of around $10 and activation fees of around $5.9 As mentioned, there may also be extra fees to check your balance, get cash from an ATM, and so on.10
Sources:
4 - Nacha - International ACH Transactions
5 - US Bank - Cross-border Payments Wire and International ACH
6 - Nerdwallet - Foreign ATM and Debit Card Transaction Fees
7 - BCU - Foreign Checking Processing
8 - CNBC - Best Prepaid Cards
9 - Consumer.gov - What You Should Know About Prepaid Cards
10 - Wise Trustpilot
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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