It all adds up: When making cross-border FX payments, speed, accuracy and competitive rates are the name of the game. Photo credit: Unsplash
When it comes to making cross-border payments – be it to anywhere in the world – you need a payment solution that is reliable, quick, hassle free and cost effective.
The last thing you need is to be bogged down by hidden fees, and slow and static FX (foreign exchange) currency rates with limiting options.
FX costs can mount, especially if your bank is charging you at published board rates of 2-3%. Banks justify this by claiming that your transaction is too small for them to get refreshed rates from a trader. Thankfully, this is 2021 and many platforms can do better.
But before we go into some introductions, it is important that we understand where FX costs are hitting you.
Overseas payments are most obvious, as you will need to purchase a foreign currency in order to pay your vendor or supplier. Overseas collections are slightly trickier as you may receive your funds in SGD, thinking that you do not bear any FX costs.
But the truth is, your customer is bearing the FX costs when he or she sells the local currency to convert into SGD. This means that your product is inflated in price just because of the FX costs, which translates to lower sales for you.
Therefore, one of the key criteria to a good FX platform is a multi-currency receivable solution that allows you to receive the funds in the local currency of your customer (saving his FX and transfer costs), after which you control the subsequent conversion and remittance. With full control on the cost, you can now better price your product to reach the most customers.
Lastly, credit card spends can be the worst when used to pay in foreign currencies. This is because foreign exchange fees charged could reach up to 3.5%, which is way more than anyone should pay.
Today, we will focus on overseas remittance and collection providers, and how they can deliver cost-effective, transparent and easy solutions to your traditional banks.
Here’s a round-up of three of the best cross-border payment providers for your business.
What it is: TranSwap is an award-winning, scale-up fintech company that helps businesses move money better, with offices in Singapore, Hong Kong, Indonesia, Malaysia and the United Kingdom. You can make payments, collect funds securely, and convert and manage currencies using a global account that can accept multiple currencies.
Cool features:
1. Make payment to more than 180 countries, and hold and manage up to 34 currencies in one global virtual account.
2. Enjoy dealer support when you call in to book rates – suitable for more traditional SME owners who prefer to talk to a person.
3. Benefit from competitive rates for CNY payments to China that are reliant on TranSwap’s internal demand supply mechanism.
4. TranSwap is API enabled. You can use its API to automate business processes to instruct currency conversions between your wallets, request exchange rate information, initiate money transfer requests, and more.
5. It is relatively affordable with an estimated cost of 0.40% on FX spread and a flat fee of SGD14 on a $1,000 USD-SGD conversion, as published on its website. This is still much cheaper than what most banks are charging.
How to get started: Sign up for an account here. Or you can download the TranSwap app from the App Store or Google Play.
To sum it up: With a wide range of choices in terms of countries and currencies, TranSwap is a good option for SME owners who make international payments frequently and need real-time FX rates.
What it is: Founded in Singapore in 2014, this digital cross-border payments company (short for “instant remittance”) makes it simple for businesses to spend, send and receive money worldwide with almost-instantaneous transfers with no hidden charges.
NIUM, Instarem’s holding company, is regulated by the Monetary Authority of Singapore. It also has licenses and offices in Australia, Singapore, Indonesia, Malaysia, Japan, Hong Kong, India, the United States, the United Kingdom, Canada and Europe.
Cool features:
1. Instarem offers highly competitive FX spreads at close to 0.05% with a flat fee of SGD4 for a $1,000 USD-SGD conversion if you pay via PayNow.
2. Enjoy real-time payments through multi-currency wallets with real-time conversion rates, instead of having to wait for days.
3. Send out payments to multiple beneficiaries in various currencies through a preset single action.
4. Using Instarem, you can send money to over 60+ countries. As for receiving, you can receive money for local transfers from your client from 7 different countries and manage the FX conversion when needed.
5. Use your corporate credit card limit to make business payments, and save on borrowing costs and processing fees.
How to get started: Just sign up to start sending money. Or download the Instarem app from Google Play.
To sum it up: Instarem offers a host of options, tons of flexibility and more importantly, almost instantaneous transfers. It’s a quick way to make life a lot easier for yourself.
What it is: Formerly known as TransferWise, Wise was set up in 2011 by two good friends from Estonia with the aim of making international money transfers cheap, fair and simple. Today, its multi-currency account serves more than 10 million people and businesses around the world.
Cool features:
1. Get charged mid rates for real-time FX conversions here, with a flat fee of SGD5 on a $1,000 USD-SGD conversion.
2. Receive payments from anywhere, and convert them to over 50 currencies.
3. Enjoy guaranteed rate pricing after you book your FX rate, meaning you can book it first and get it funded within 96 hours.
4. Benefit from API and bank integrations.
5. Make invoice payments to more than 70 countries using real exchange rates that can be 19 times cheaper than PayPal.
6. Perform batch payments for up to 1,000 people for payroll purposes, for instance.
How to get started: Sign up here for an account in minutes or get help here. Find out more about the pricing plans here.
To sum it up: Wise is a handy platform to use if your business has offices all over the world, or if you frequently need more time to get your funds in but want the rate you booked to be locked in until you receive payment.
While it is important to choose a quick and cost-effective cross-border payment provider, trustworthiness and reliability are also key.
The reason is if and when one of your transactions goes awry, the payment provider should offer prompt assistance, and follow up with you until the issue has been resolved.
Before you proceed with any conversion or transfer, check that the payment provider is operating in the country where payment is being made or received.
The transfer fee should be reasonable and transparent, and the FX costs should not be unreasonably expensive when compared to a standard benchmark.
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Belinda loves thinking about random stuff, and collecting useless bits of facts and trivia. She often roots for the underdog, and believes the world needs more happy endings.
