Nowadays almost all the companies need to do business with a client or supplier from another country. In these global times it is no wonder. You often find better, cheaper, or simply more suitable services in another country.
Once you will organize the shipping and clear up any possible issues with the VAT that you might have, you will find yourself with the international invoice in your hands. Now you may start to wonder what the best way is to provide safe, cheap and fast payment to your supplier.
Paying international invoices, especially if you need to send the money overseas, can be tricky. It can get expensive and the transaction can take a lot of time. You can end up being shocked by the crazy exchange rates or high fees of the money transfer companies. So, make sure to make a small research in advance in order to avoid any useless costs.
What Should an International Invoice Include?
After receiving the invoice, make sure that it includes all the information that is required in your country, so you will have no problem with your financial institutions or tax inspection.
To make a payment you will need company details of your supplier and the information about their bank (or intermediary bank). To make a transaction, you will need their IBAN (International Bank Account Number) and BIC (bank identifier code) of the supplier or their e-mail address (if registered on PayPal).
A good tip is to ask your supplier to create an invoice in 2 currencies, in their domestic currency as well as yours (or agree at some common one – dollars or euros). Not only can you compare the final rates in both currencies, but you may find it better to pay in your own currency, so you do not have to deal with exchange rates.
Cheap and Safe Ways How to Pay International Invoices
Now that you have the final invoice in front of you, you have more options, how to send the money to your supplier.
There are more aspects, which you have to consider: the country that you are sending the money to, the supplier’s options (whether they have a bank account/PayPal), the invoiced amount, the time in which you need them to receive the money, currency, fees, how likely it is that you will need to get the money back…
There are quite many things to consider, but don´t worry. We have prepared 5 best payment options for you, which will make your decision much easier:
1. Money Transfer Directly into Their Bank Account
You can decide to transfer the money from your bank account directly to your supplier´s bank account. However, make sure to check the provision of the bank in advance to see, how much they charge for such transaction. The costs can be between few cents up to $20.
Therefore, this option is more suitable in cases when the amount on the invoice is significantly bigger (above $800 – 1000). If you need to transfer a smaller amount, we advise you to choose another payment method.
Also, transactions via bank account can take a lot of time and the suppliers often have to wait to receive their money. In some cases, the money has to go through an intermediary bank (or even more of them), which slows the process down significantly, can cause some issues along the way and – as you may have guessed, each one of these banks is taking their provision for their work.
Consequently, you will pay more as agreed with the supplier and he/she may get less as you actually sent them. This can cause some unnecessary misunderstandings and complicate your relationship with your supplier.
2. Use the Credit Card
In comparison with the previous option, payments via Credit Card are more suitable in cases when the amount on the invoice is not as high. As you will be charged some percentage of the transaction by your bank (somewhere between 3-5 %), providing your supplier with your credit card details is a good idea when you are being charged somewhere between $ 100-200.
PayPal is one of the biggest internet payment companies and remains one of the most used online payment methods. It is user friendly and accepted in most of the countries, which makes it highly effective for the user. When paying for services, you can use the finance balance that you already have on your PayPal account or you can also pay smaller bills without any balance.
However, PayPal is more suitable if you are paying for smaller amounts up to $ 200, as the fees can rise into quite a big amount with bigger amounts.
Also, PayPal provides good support, which can come in handy if you will need some refund later on. You may choose to use a Paypal Buyer Protection and in cases when you will not receive the items you ordered (if the supplier cannot provide them with a proof of actually having sent them) or there would be a problem with them, PayPal will help you get a full refund.
TransferWise is another online payment platform, a P2P service which is very user friendly and offers great fees. You do not need much to create an account and then you can make money transfers to most of the world countries (even to some, which you cannot reach by PayPal, e.g. Turkey).
In addition, you can see a clear and understandable calculation of the fee charges before you confirm the payment, so there will be no unpleasant surprises on your bank account later.
There are few issues though. Firstly, in order to make a transaction, you still need to use your credit card, debit card or bank transfer. You cannot pay via cash or cheque, neither can you pay to someone who does not have a bank account. Another issue may be, that TransferWise does not support all the currencies and countries, so you can not use it all the time.
5. Western Union
Western Union is not that commonly used anymore as the online payment platforms. It lacks the transparency when it comes to setting fixed fees and rates right away, so you cannot see in advance, how much you will be charged.
The final price depends on the amount you are sending, the destination and the way that it will be received. However, there are some positives of Western Union, which other online payment platforms can´t cover yet, that it why it still is on our list.
Western Union can be found almost everywhere, so your payment can reach even distant suppliers, whom you would not be able to pay otherwise. We are talking about some parts of Asia, Africa, and South America, where no other payment methods would be possible.
If you will need help with the communication with your supplier, the bank or support team of any of the online payment platforms, do not hesitate to contact us. We will happily assist you with a quality, understandable translation of your letter or message into more than 85 world languages. We may even give them a call for you in their local language, so you will reach them faster and understand the issue better. Contact us for more information!
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