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Using an international money transfer service instead of your bank when paying international employees or invoices can save you both time and money. We break down the best ways for your business to make international payments to help you get back to work quicker.
Compare international money transfer services for businesses
Our table below lets you compare services you can use to send money abroad. Compare fees, exchange rates and discounts from different money transfer services, and when you have made your choice, click Go to site.
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Does your business need to transfer money internationally?
There might be a number of reasons why your business needs to transfer money overseas. Here are the most common:
- Paying a supplier or vendor
- Paying international contractors or employees
- Paying commercial bills
International money transfers for business
Money transfer providers are specialists that can get your funds from A to B at a low cost. And they'll likely hit your account – or the account of your supplier, contractor or employee – sooner than other options such as banks.
Many specialist money transfer specialists also offer forward contracts, limit orders and recurring transfers to save you time and money.
- Best for: Businesses looking to send quick, cost-effective payments that can benefit from additional money-saving features.
Business payments for online sellers
For a service that goes beyond directly sending and receiving payments, a business payment account with a money transfer provider may better suit your business's needs.
One such provider is Wise. Its Borderless program allows you to set up local bank accounts in up to 15 countries so you can pay and get paid as though you were local.
- Best for: Businesses looking to work with multiple currencies and accounts in multiple countries, all in one place.
Cost-effective international transfer services for online sellers
International payroll services
When you're looking to pay your employees, you can potentially get everything handled by an international payroll service. It processes the entirety of your payroll and stays up to date on regulation changes so you don't have to.
- Best for: Paying your borderless employees without dealing with local tax laws and payroll regulations.
Bank transfer
A bank-to-bank wire transfer may be the most familiar and well-tread path, but it may not be what's best for your business. International wire transfers often come with steep transfer fees and poor exchange rates. Typically, banks like Westpac and NAB can charge upwards of $50 for an outgoing wire transfer.
- Best for: Paying vendors that only accept wire transfers.
Send wire transfers through money transfer companies to save money
Mail a check
Failing all other methods, you can mail a check. Doing so comes with quite a few drawbacks, including comparatively lacklustre security and slow delivery times.
- Best for: Times when no other option is available.
How do I find the best money transfer service for my business?
For business owners, time can sometimes be more valuable than money. You may think that because it handles your other finances, your local bank is the simplest and most obvious option when sending money overseas. In truth, international money transfers are no longer a game for only tried-and-true players such as banks. Newer companies and online money transfer providers promise to undercut the competition to earn your business and will usually deliver your money to recipients faster than the banks can.
Take a closer look at the following areas to find the best money transfer service for your business:
- Exchange rates. You may see a great exchange rate being advertised but you need to make sure that the rate you see is the rate that you receive. The mid-market exchange rate is the best rate you can receive – it's the rate at which banks buy and sell a currency. However, many banks and some money transfer services will have their own exchange rates, which are often worse than the mid-market rate. This can make a huge difference if you are regularly sending large amounts overseas.
- Fees. Check the fees carefully. While it might seem that there are no fees to pay, it's more than likely that the exchange rate will have a large margin added to it. Your business transfer might be free but how much more are you having to pay because of a weaker exchange rate?
- Discounts. Many services might offer discounts on the transfer fees or waive the fees altogether when you send larger amounts regularly.
- Forward contracts and limit orders. Find out which, if any, tools are on offer from a provider such as forward contracts or limit orders. Forward contracts allow you to lock in an appealing exchange rate for future money transfers while limit orders allow you to wait until you find a better exchange rate and then lock it in for your transfer.
- Transfer methods. Each money transfer service today accommodates a different variety of payment and transfer methods. What you and your recipient are used to is crucial in choosing the right service. For example, some providers might allow payment through PayID and POLi while others may not.
- Compare. Finally, compare several money transfer providers before choosing one. Do your research to find a provider that offers reliable and affordable business transfers.
Let's crunch the numbers: Sending a $5,000 business money transfer to the US
Let's say you need to send $5,000 to a supplier in the US. Here's what you might face as far as fees and exchange rates as of 30 September 2021.
| Money transfer service | Major Australian bank transfer | |
|---|---|---|
| Fee | 23.18 AUD | 10 AUD |
| Exchange rate | 1 AUD = 0.7194USD | 1 AUD = 0.698405 USD |
| Transfer speed | Same day | 3-5 days |
| Amount received | USD 3,580 | USD 3,485 |
| Verdict |
|
|
Even with the money transfer service charging a higher fee, the bank option is both slower and more expensive when paying a supplier in the US. If you went with the money transfer service, not only would your recipient get the money faster, they'd also get an extra US$100 thanks to stronger exchange rates and lower fees.
Banks may seem like the more convenient option, but once you set up an account with a money transfer company, you can send money with a few clicks.
How can I receive international payments?
How you set up to receive funds is going to depend on what type of service you go with. Banks are likely to give you the option to open the account and get started in person, while a dedicated money transfer service will probably have fewer physical locations. You'll likely also have the option of opening an account over the phone or online.
The process is a bit more involved for business accounts, so set aside at least a half hour in most cases to get through the entire application. Make sure you have your personal details, business information and any relevant financial information you may need.
Do I pay taxes on international business transactions?
Income from abroad is still taxable in Australia. Also be aware of any international tax laws that might apply, especially if you have an international bank account. While there are many treaties around the world to avoid double taxation, you may still be subject to additional taxes.
Because tax guidance and regulations can be confusing for businesses with foreign income, you'll likely want to seek out a business accountant to make sure everything is above board. Some international business payment solutions like FlyWire can also help you manage your business taxes.
What are the hidden costs of an international business transfer?
When sending a business money transfer, you may be quoted one fee on top of the amount you want to send. But if you look closer or ask for a breakdown of this fee, it could relate to a number of hidden fees relating to the following:
- Poor exchange rates. When dealing with popular currencies, you might get a great exchange rate from a provider. However, that same provider might add higher margins to the exchange rate on exotic currencies resulting in you spending more. Find a business money transfer service that offers the best exchanges for the currencies you use the most.
- High fees. Is there a flat fee for your business transfer or a percentage of the total amount? And do you have to pay to receive a business transfer from overseas? Depending on the nature of your business and how you operate, you may want to compare flat fees against variable fees to find the most cost-effective option.
- Transfer delivery speeds. Business transfers can usually be delivered within 1-5 business days. If you want your transfer to arrive sooner, then you'll pay for a faster turnaround. While instant and same-day transfers are available with some services, you could pay more for these options.
- Payment method. How you pay for your business transfer can make a difference to the overall cost. A bank transfer tends to be the cheapest option while making a payment with a credit card could mean higher fees.
Bottom line
While there's no one perfect product for making international business payments, knowing how to evaluate solutions and find the best one for your business goes a long way. Compare international money transfer providers to get more details on the services they provide, how to better measure them against one another and what to do once you choose one.
Frequently asked questions
Are the application requirements different for businesses than for individuals?
If you wish to send money internationally on behalf of your business, you will need to register your business details for the account. This includes the business name and registered address, the ABN, ACN or ARBN number, details of the company directors, owners and/or shareholders and a description of what the business does. You will also need to register a bank account that is in the same name as the business.
Are international money transfers safe?
Yes, international money transfers are safe. The Australian Securities and Investments Commission (ASIC) regulates money transfer providers in Australia in the same way it does traditional banks. The money transfer providers operate under a financial licence, which you should be able to check via the provider's website.
Is it cheaper to send funds overseas through my bank or a money transfer provider?
It is typically cheaper to send funds through a money transfer provider due to better exchange rates and lower fees.
How do I track my business transfer?
Your provider or bank will give you a tracking number so you can monitor the progress of your transaction. For more information on tracking your transfer and what to do if it goes missing, check out this guide.
What currencies can I transfer?
This varies between providers. Certain currencies are staples on the international currency market, such as the US dollar or the euro, while other currencies are rarer. Contact your provider for a full list of the available currencies.
