In an ideal world, global traders would offer their customers as many payment methods as possible. However, this is expensive and impractical. Payment gateways charge a range of fees, and every new gateway would heap more payment obligations on your business. This might be feasible for a multinational company — but most global SMEs don’t have the budget.
In this article, we will show how to accept global payments, the variables that you should consider before selecting a payment method, and 5 ways to receive international payments in the UK.
This article at a glance:
Global SMEs need fast, affordable payment service providers with bulletproof security solutions. While strong on security, traditional banks charge high fees and payments often take several days. E-wallets like PayPal are only good for small payments, and ‘By Now, Pay Later' works well at a B2C level. Multi-currency accounts provide a great alternative to traditional banking — no onboarding fees, frictionless cross-border payments and are 100% online.
Global payments in the United Kingdom are defined as payments that take place using a bank account and payment services across international borders. Global payments allow for efficient and secure money transfers between and within countries, allowing people to seamlessly send and receive funds with speed and ease. They also provide a simplified means for businesses to make and receive payments on a global scale, providing a higher level of convenience than traditional methods of transferring funds such as checks or manual wire transfers.
Global payment service is a type of payment gateway that allows businesses to accept payments in multiple currencies (from around the world) and with different payment methods. Customers can also use this service to make international payments. Global payment services are becoming increasingly popular as they enable business owners to process multi-currency payments safely and quickly, with minimal fees and charges.
The acceptance of global payments necessitates two things: a payment gateway, and a payment processor.
A payment gateway is the means by which the payment is made — the online equivalent of a point-of-sale (POS) system. Whereas the payment processor is an intermediary between the payment gateway and your merchant bank.
These are some of the factors that you should consider when choosing a global payment service provider:
Let’s look at your options.
Debit and credit cards are one of the most popular means of making payments among consumers. UK Finance reported that in January 2022 there were 1.7 billion debit and credit card transactions in the UK alone, a 42.8% increase from the previous year.
Be warned — you will incur charges. International merchants making a cross-border payment to their suppliers using Visa or Mastercard will be crushed with service and data processing fees. As a result, many businesses collect per-transaction fees from their customers at POS. Ultimately, this means your suppliers could end up paying more money and as a result, you may lose your competitive edge.
E-wallets store users' payment information on a financial transaction application — for example, their credit card details — allowing them to make cardless purchases.
E-wallets' versatility has made them as popular as debit card payments. Consumers use e-wallets to store, send and receive anything from money and vouchers to coupons and tickets. The statistics speak volumes. In the UK alone, about a third of consumers who made e-commerce payments used digital wallets in 2021.
However, international merchants should be mindful that e-wallets are useful for only making small payments. For example, you would incur huge fees if you used PayPal to send money to your suppliers in another country.
PayPal and Apple Pay are popular digital wallets in the UK. Let’s explore your options.
PayPal is free, except for currency conversions, which makes it a poor option for international merchants. However, it’s popular among British consumers. According to PayPal, more than 20 million shoppers in the UK use PayPal each year.
Merchants who opt for PayPal can offer their customers PayPal, Pay in 3, PayPal Credit and local payment methods. You can also send invoices, and accept recurring payments and subscriptions with PayPal.
There’s a catch — merchants are charged per transaction.
Dave owns a clothing outlet in York. He buys his clothes from a supplier based in Bulgaria. He needs to send £10,000 via PayPal to his supplier. He calculates that after exchange rate mark-ups and various processing fees, PayPal will take € 750.91 euros — nearly 1/10 of his entire payment.
Apple Pay is Apple’s digital wallet and mobile payment system. It uses near-field communication (NFC) technology that allows users to pay with their iPhones, Apple Watches, or iPads — instead of physical cards.
1. Security Concerns: Apple Pay requires users to keep their iPhones secure, which is a large responsibility. Users need to ensure that their phones remain hacked and malware-free, as any malicious activity could lead to theft of credit card information.
2. Limited Availability: Currently, Apple Pay is only available in several countries, leaving many customers unable to use the service.
3. Compatible Devices Required: Customers must have an iPhone 6 or newer with Touch ID for Apple Pay to work properly, so owners of older iPhones are out of luck when it comes to payments.
4. Less Acceptance from Merchants: While most merchants accept credit cards, the same cannot be said for digital wallets such as Apple Pay at certain times or locations. This can lead to a lot of frustration for shoppers when they try and check out but find that their payment method isn’t accepted.
5. Transaction Fees: Like other forms of digital payments, banks and merchant services charge additional fees for each transaction made with Apple Pay which could limit its wide acceptance by businesses in the future
A multi-currency account allows you to store, send and receive money in different currencies, similar to a traditional bank account. However, bank accounts charge monthly fees, onboarding fees and deposit requirements — whereas, a multi-currency account like Silverbird doesn’t.
Multi-currency accounts are perfect for international merchants because they allow you to avoid the hassle and confusion of managing different bank accounts at the same time.
Silverbird offers multi-currency accounts for global traders, allowing you to send payments to over 200 countries and receive money from over 60 countries, open e-wallets and exchange foreign money. The onboarding process is simple and 100% online — no monthly fees, onboarding fees, or deposit requirements. Our fee structure is transparent and simple:
Silverbird is different to other payment service providers and banks. Our multi-currency accounts are exclusively primed for international traders making high-value cross-borderpayments.
A bank transfer is simple: the sending of funds from one bank account to another through electronic means.
This is a convenient option if both the sender and receiver share the same bank. However, international transfers and transfers to different banks are usually expensive and slow, taking several business days to complete. Arguably, this is one of the reasons why only 7% of UK consumers use bank transfers to make payments.
If you are receiving international funds, ensure that the sender has your correct information. UK bank transfers require the following details:
There are alternatives. Western Union, OFX and World First transfer funds between international banks, at lower fees and better conversion rates. However, there are usually minimum transfer amounts, and these ‘non-banks' usually do not offer foreign currency accounts. Be warned — these organisations are vulnerable to security breaches and their customers' accounts are often hacked.
BNPL makes payment-on-credit more accessible to the masses. For this reason, it’s fast gaining popularity in the UK — particularly among young people who fear missing out on the latest gadgets.
With BNPL, shoppers pay for purchases in interest-free instalments spread out over a period of usually 12 months or less. Late payments typically incur charges.
BNPL is convenient for consumers and encourages higher spending — the average consumer spends 30% more than when they use card payments. One reportfound that 57% of the BNPL merchants in the UK surveyed saw an increase in basket conversion and 46% reported a far higher order value.
This is a great option if you run an eCommerce store or website, but for international merchants under contractual obligation to pay their suppliers, this is a poor option.
The best international payment gateway for your business will depend on the needs of the company, such as its budget, preferred currencies, customer base and selected partners. However, some of the most popular payment gateways to consider are PayPal, Stripe, etc.
Whichever payment gateway you choose, make sure it works with your existing systems and meets the regulations of your target markets. Your payment service provider should also provide timely customer support services to ensure business success across borders.
At Silverbird, we offer a smart alternative to traditional banking. Hold, transfer and exchange foreign currencies online simply by using a single account. In order to avoid facing low forex rates when transferring your funds, we offer multi-currency accounts catered to international merchants like you, so that you can convert over 30 currencies within a single account.
Start onboarding today.
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