How to Pay Vendors Overseas

In this age of online shopping, buying and selling to international companies is the norm. Of course, if you purchase something, you should pay for it. The reality, though, is that paying vendors overseas can be consuming, time-consuming, labour-intensive, and expensive.

What to Consider When Making International Payments

If you need to pay a vendor, supplier, or freelancer based abroad, you must consider the currency payment you will give. In some cases, internal suppliers or vendors would want to be paid in their home currency. Others won’t mind if you pay for them in USD. So before making a purchase or signing a contract with an overseas supplier, vendor, or freelancer, it is best to clear this matter out.

Since the type of currency will be taken into consideration, you should also make sure that you get the most out of your money by choosing a reliable currency exchange provider that gives competitive rates without high fees.

The duration of the payment transaction is another factor you should take into consideration when making international payments. Ideally, a payment made within the day is the best, but if one to two business days will pass before the money is sent to your vendor’s account, that is ideal too. However, if it takes up to a week before the transfer is completed, it can be a hassle for you and the other party overseas you need to pay.

Overseas Payment Options

Here are the common international payment options you can choose from when paying vendors overseas:

Bank wire transfers

This is the most common way to pay international invoices. This option allows you to send money from your bank account directly to the bank account of the vendor, supplier, or freelancer you need to pay. You can make bank wire transfers regardless of where an account is located worldwide.

Most banks and credit unions offer this type of service. However, remember that these financial institutions often charge between $30 to $50 for each international wire transfer transaction and mark up their exchange rate by 5% to 6%. You should know that sometimes the bank of your vender may charge additional fees for incoming wire transfers, so take note of this when sending your payment to them via bank wire transfers.

PayPal or Credit Card

PayPal uses a straightforward method for facilitating international payment transfers. This is especially ideal if you are making small payments. However, know that PayPal has its own set of fees, and they charge both a percentage fee and a flat dollar fee per payment transaction you make. Their fees are based on the amount of money you are transferring.

On the other hand, using your credit card to make international payments will require you to pay high foreign transaction fees. Typically, their fees are around 3% of the total fee you will transfer.

Peer-to-Peer Money Transfer

This option allows one user to transfer funds from his bank account to another individual’s account via a digital medium such as the Internet or mobile device. This payment option is categorized based on transfer—whether within or outside the bank. For international payments, peer-to-peer (P2P) transfers will match buyers and sellers of different currencies to deliver competitive exchange rates.

This option is ideal if you want to save on banks' high exchange rates. P2P money transfers usually only charge a commission of 0.5 to 1.5%, unlike banks who charge at least 5%. The downside of using P2P, however are unstable estimated rates and delayed processing.

RemitBee Business: The Best Option to Pay Vendors Oversees

RemitBee’s send money service is the best option you can choose if you want safe, reliable and affordable money transfers. RemitBee is known to give the best exchange rates to its customers without imposing high fees. With RemitBee, you can even send money online for free when you transfer over CAD 500! Your vendor need not wait long before the money is transferred to their account since a transaction is typically completed within minutes up to a day! The business feature allows for high sending limits and extra security.

What are you waiting for? Pay your vendor, supplier, or freelancer overseas with RemitBee now. Sign up here