There is expansion in this global economy and it is no longer the case that small businesses are restricted to their yards. The popularity of e-commerce and digital services has made it feasible for even the least of businesses to do business with a wide customer base.
However, in regards to receiving payments from customers located in different countries, a few small businesses run into trouble such as incurring large transaction costs, changing the currency and other bureaucratic procedures that may be required by the law.
For small businesses to enter the international market, they must offer international payment methods that are secure and inexpensive for the customer. This guide will focus on solving some of the most common problems when entering foreign markets as well as explaining which international payment category is the most effective.
Credit Card Payments
When selling products and services to international customers, credit cards also rank as one of the most preferred payment methods. In most countries, credit cards– which are issued by the likes of Visa, Mastercard and American Express- are well accepted and as such can be used when conducting cross border transactions. Small businesses can, therefore, guarantee successful transactions with international customers through accepting credit cards which are basic payment options to the customers.
Nonetheless, credit card processing compared to other forms such as wire transfers for international payments tends to be more expensive considering the foreign transaction fees, as well as currency conversion fees. Such costs can be a burden on profitability, and it is quite limiting for those businesses with limited resources.
Recommendation: ZilMoney for International Card Payments
If you are a small business and seeking to accept credit card payments online at flat processing fees, ZilMoney has a solution. Thanks to ZilMoney, you do not have to incur the high credit card processing fees mainly associated with global processors. ZilMoney makes it easy to enhance your bottom line by using reasonable rates while making it easy for your customers to pay from any part of the world through their preferred currencies. ZilMoney can facilitate you accepting payments in any currency such as dollars, euros, etc, in a simplified manner and reduce overheads in the process.
PayPal
PayPal is one of the most used online payment gateways around the globe with millions of its consumers. PayPal procedure for free allowing small businesses to include an international payment solution without much hassle and especially on e-commerce. The regional limitations are no more when it comes to payments since the platform accepts different currencies, and it assures international clients who may feel reluctant to provide their credit card info directly due to fears.
Even though online payment systems like PayPal provide convenience, it comes at a cost, especially concerning international transactions. The effects of exchange rates and the high cross-border fees can affect your profit margin in total. However, this payment mechanism is still very well liked – mainly due to the fact that it is simple and works almost globally.
Bank Transfers (SWIFT Payments)
In the case of amounts over a certain threshold or business-to-business payments, it is quite common to use international bank transfers via the SWIFT network. SWIFT facilitates monetary transfers between several foreign banks with high safety standards. This payment method is usually limited to persons and businesses who want to transact large amounts or deal in sales where there is a lot of documentation of contracts related to the goods being sold.
However, being reasonably safe, SWIFT payments can also take quite some time, spanning from a day to a few days. Also, common is the issue of cost for bank transfer transactions, especially for the less valued transactions and even more when it comes to international transactions. As with the regular bank cost, foreign exchange and correspondent bank charges could lead to high increases in the initial price of the transaction. This method is not suited for small businesses and ideally, they need to explore this option only when making such big transactions.
Digital Wallets (Apple Pay, Google Pay, Alipay)
Apple Pay, Google Pay, Alipay and such digital wallets have enhanced acceptance for the international clientele especially in Asia and Europe. These payment methods are fast and safe since the customers use their mobile phones to pay without the need for having a physical card or stuffing the customers with the payment details.
Though these platforms present an easy way of paying for goods for international persons, the offer of digital wallets may not be present in all countries. On the other hand, it is the responsibility of the small enterprises to have payment solutions which have integrated with these wallets, which may impose more costs of moving and installing.
Cryptocurrency Payments
For firms set to provide advanced means of making payments, companies can utilize the cryptocurrency payment option. There has been a growing trend of people using Bitcoin and Ethereum and other virtual currencies as payment methods. With the increasing number of customers who are accustomed to the use of technology, introducing cryptocurrencies as an additional payment method is likely to be appealing to such customers. And it also facilitates customers from countries where there may be no reliable banking facilities.
However, as some see the very rise of such means of transactions like Bitcoin as a revolutionary financial process, the risk of managing these payments always includes the risk of currency price volatility. Therefore, businesses need to analyze the risk of high costs and coverage for losses when there are international changes in the exchange rate and their payment method needs to be in a safe environment.
Best Practices for Accepting Payments International
While it is commendable to have multiple payment methods which include credit and debit cards, it is also reputable to be able to follow the guidelines that ensure that the transaction is seamless for one’s company and more so the clients. Some as follows are the things you should consider doing as per the above statement:
Offer Transparent Pricing: Make sure your international customers are aware of any fees associated with the payment method they choose, such as currency conversion charges or transaction fees.
Provide Multiple Currency Options: Allow customers to pay in their local currency to improve the shopping experience and reduce hesitation.
Ensure Payment Security: Use secure payment gateways to protect customer data and prevent fraud. Offering secure payment options like ZilMoney ensures a trustworthy process for customers.
Optimize Checkout for Mobile Devices: Many international customers prefer to shop and pay using their mobile devices. Ensure your payment system is optimized for mobile users to avoid losing sales.
Conclusion: Taking Your Business to Another Level by the ways of International Payments
There is a great potential for small businesses growth once they accept international payments as it helps broaden customer reach. Payments made by credit cards, PayPal, bank wire transfers, Online wallets or even cryptocurrency.