Doing business abroad: international payment solutions

According to Statista, nearly 30% of businesses and consumers cite efficiency as a significant issue when initiating cross-border payments. Providers can struggle with these transactions because of varying regulatory requirements, technological barriers and fluctuating exchange rates, making international payments costlier and slower than domestic ones. 

In fact, cross-border payments can take up to 10 times longer to process, and late or failed transactions are common. Over half of SMEs in Saudi Arabia and India regularly encounter challenges, compared with 40% in the US and 31% in the UK. These difficulties have led many business owners to either avoid or limit cross-border payments, underscoring the need for reliable, efficient international payment solutions. 

In this article, we'll explore how choosing a licensed alternative banking provider can help make global expansion easier and ensure compliance with foreign regulations. 

Why is it so important for businesses to have international payment solutions? 

Expanding your business overseas can be challenging, especially when it comes to managing cross-border payments.  

We live in a globalised economy, meaning individuals and businesses need to access international payment solutions so they can make, hold and receive payments around the world. Unfortunately, this is not always an easy task.  

Who is likely to face barriers in accessing international payment solutions? 

Complex structures 

Entities that have different levels of ownership spread across multiple jurisdictions may find it difficult to access traditional banking services in countries they’re not based in. Traditional financial institutions in the UK often don’t have the risk appetite to onboard complicated customers. 

Non-residents

Most traditional UK banks require individual or entities to have UK addresses before they can open business accounts. Those that accept overseas addresses often have income or asset thresholds, which can be hard to overcome. 

Individuals or entities living in or doing business with ‘high risk’ countries 

If you live in a country considered ‘high risk’ by a UK bank, you may find it difficult to access domestic banking solutions. Similarly, doing business with partners in high-risk countries can make it difficult or impossible to open an account, or put you at risk of being debanked. 

The consequences of not having an international payment solution 

Without a comprehensive multi-currency business account, it’s much harder to make and receive secure international payments. This means you could find it much harder to do the following: 

• Expand your services to other markets around the world.  

• Secure investment to help you take your business to the next level. 

• Provide more flexibility and better payment terms for customers and clients. 

What if you can’t even access basic banking services? 

If you can’t open a basic account, you may find it very difficult – perhaps impossible – to perform ordinary tasks like:  

• Buying inventory, both in the UK and abroad. 

• Paying domestic and international suppliers. 

• Hiring new staff in the regions where you do business. 

How offshore banking solutions can help 

Offshore banking, as the name implies, is when you operate a bank account in a country you don't live in. You may be able to open an offshore bank account with a traditional bank, or an account with an electronic money institution like Interpolitan (EMI) which will safeguard your funds with a banking partner. 

How does an international payment solution make it easier to pay your suppliers abroad? 

1. You look more professional and trustworthy  

Using a reliable international payment solution from a regulated and licensed provider can make a better impression on prospective clients or customers. In time, this can help you retain existing partners and customers, plus gain new ones. 

2. Your suppliers could receive their funds faster 

With a multi-currency account, you can segment currencies into subaccounts and choose from a range of convenient payment options – for example, quick local payments in a supplier’s currency, or SWIFT for electronic transfers.  

Over time, this can help you build trust and develop a good reputation with other businesses.  

3. You can automate your payments to save time 

Some providers offer mass payments. If so, you can streamline your payment processes via batch and bulk payments to cut overheads, save time and improve business relationships. 

How does an international payment solution make it easier to get paid from abroad? 

1. You could get paid faster 

Quick payments make it easier to maintain a healthy cash flow and grow your business. Instead of making cross-border payments, clients and partners simply send funds to a local IBAN. 

2. You can collect a range of currencies in the same account 

With a single multi-currency account, you can set up local subaccounts in the regions you work in, making it easy for suppliers and customers to pay you. This makes it much easier to track payment activity and manage cash flow.  

Additionally, you don’t have to convert funds to your home currency when exchange rates are unfavourable, which can save you money. Instead, you can keep them in your subaccount and use them to make local payments. 

3. You don’t have to juggle multiple accounts 

As well as being convenient, international payment solutions are a big time-saver. With a functional multi-currency account, you no longer have to keep track of different accounts in different countries.  

Instead, you can view subaccounts from one central platform, look at a balance overview and transfer funds between currencies quickly and easily. This can make doing business less time-consuming and more cost-efficient. 

Navigating international compliance 

Different regions have different sets of rules about financial regulations and compliance. As a business owner, you might not have the time to familiarise yourself with all the rules, which are subject to change – sometimes at short notice. 

For this reason, it’s much more economical and convenient to work with a business account provider that has expertise in international financial regulations and compliance procedures. A dedicated account manager can help you understand any complexities and overcome hurdles as you expand your business abroad. 

Choosing a licenced provider 

Before opening a new account, it’s vital to ensure your provider is properly licensed: if you choose an unlicensed institution, your funds and data might not be safe. Even worse, associating your business with an unlicensed provider could put your reputation at risk. 

Here is a simple checklist you can follow to ensure a provider is safe to do business with: 

• Is it regulated by the appropriate financial authority? In the UK, this is the FCA. 

• Does it have the correct permissions to carry out its financial activities - for example, a banking or electronic money institution licence? 

• If the company claims to have a UK presence, is it registered with Companies House? 

• Does the provider have a detailed terms and conditions page on its website setting out how it uses your data, secures your funds and complies with all relevant laws and regulations? 

Going global with Interpolitan 

In this article, we discussed the importance of having an effective international payment solution for business owners looking to expand their operations overseas. We also looked at the pitfalls many business owners encounter when they don’t have access to this solution.  

To move funds seamlessly between people and businesses around the world, you need a wide choice of currency options, flexible payments and the assurance that your funds are safe and secure. Choosing a reliable, fully licensed and regulated financial partner can also help you stay compliant with international rules and regulations, protecting your reputation in different countries. 

What sets Interpolitan Money apart from other international payment solutions is our personalised service, which includes access to a dedicated account manager. We offer this because we recognise that many entities and individuals have complex global banking challenges that require expert guidance and cannot be resolved by chatbots or virtual help desks. 

If you’d like to learn more about how we can help you grow your business abroad, talk to us today