5 Tips for Receiving International Payments Safely
Sometimes you need to receive funds from another person and when you’re separated by borders, a common way to get this done is through an international wire transfer.
Wire transfers are one of the most effective, safest and quickest ways to receive global payments and even though they can be costly, you’ll have peace of mind by using this common method.
Here’s what you need to know.
What is a Wire Transfer and What is the Difference Between Domestic and International?
A wire transfer refers to the electronic transfer of funds from one person to another using a bank account or credit union account. A bank transfer consists of instructions on who will receive the funds, including both the bank account number and the amount the recipient will receive.
So, if you need to receive funds locally or internationally, it’s important to understand the difference.
International Wire Transfers
- Inter-bank Transfer (across banks)– This refers to funds that are transferred from a bank in one country to another bank in another country and is known as the most commonly used bank transfer. Banks in both the payer country and the recipient country have to follow laws in their respective countries for reporting to the financial services authority on the money in-flow/out-flow.
- Intra-bank Transfer (same bank) – This refers to funds that are transferred within the same bank, but in another country. In this case, banks typically work through the SWIFT network. SWIFT is the network which connects any two banks. For example, a transfer from Citibank (US) to Deutsche Bank Karachi (Pakistan) has a direct arrangement, and hence the transfer will be done via the SWIFT network, without the interaction of an intermediary bank, commonly referred to as a correspondent bank.
Domestic Wire Transfers
- Inter-bank Transfer (across banks)– Funds that are transferred within the same country from one bank to another. For example, in the US, this type of transfer can be done via the Automated Clearing House aka an ACH transfer. An ACH transfer can also be known as a “direct deposit” or an automatic bill-pay and is typically done in groups or batches. In Europe, it’s known as SEPA, the Single Euro Payments Area. Essentially, banks are members of a secured, closed network that allows them to send payments to each other and exchange beneficiary details.
- Intra-bank Transfer (same bank) – Funds that are transferred within the same country between different branches of the same bank. These transfers are very simple, and most banks will simply instruct their core banking software to conduct a transfer of funds which essentially means that they debit one account holder and credit the other account holder.
Pros & Cons of International Wire Transfers
So, where do you begin? Well, it definitely pays to understand your options, so we’ve put together a list of some pros and cons of using an international wire transfer to help you make a smart decision.
- Speed – With an international wire transfer, your funds are received in real time, typically moving within one or two days. Once the funds are sent, your recipient will be able to claim it right away.
- Convenience – Receive payments from anywhere in the world. That’s right, no need to leave your house! With multiple ways to receive funds, you don’t have to look too far and wide. Whether it’s through your bank or a payment service, wire transfers can be done at your own comfort.
- Safety – It’s generally safe to use international wire transfers and many wire services typically follow regulations for them. In addition, banks only wire payments if the sender has funds available. For any wire transfer, always make sure and think carefully about who you’re receiving payments from.
- Fees – Wire transfers can be pricey! All wire transfer services do charge fees for transactions and it’s typically the sender that’s paying them. There are some services out there that require a small fee from the recipient and in general, if the transfer is international, it will be more costly than a local transfer.
- Scams – Scams involving wire transfers are very popular and all a thief needs to in order to get some cash, is take control of your bank account. Since transfers can be made anonymously, wire transfers are extremely attractive to scammers and in some cases it’s too late to recover the funds. Always be cautious and never accept a payment from someone you don’t know personally.
- Non-reversible – It’s extremely important to know that once a wire transfer is made, it’s non-reversible. The sender will not be able to get his funds back in case there is a change of mind or mistake in the amount sent.
Ways to Receive Payments Internationally
There are many ways to receive funds internationally, and thanks to many apps and online services, your choices are endless. Here we’ll explore some ways you can transfer funds, easily and securely.
1. Your Bank
Your bank can assist with many types of transfers and if you’re simply transferring funds from one account to another within the same financial institution (intra-bank transfer), this is something you can easily do at your bank. It’s important to note that transferring funds via your bank can be costly and transfers can take several days. On the other hand, transferring funds via your bank is secure and reliable and banks are normally okay with you transferring large sums.
Payoneer’s cross-border and flexible payments solution enables businesses, sellers and freelancers all around the world to get paid globally as easily as they do locally. It’s simple, fast and extremely cost-effective.
Receive International Payments with Payoneer
- Global Payment Service – Payoneer’s receiving accounts enables you to receive local bank transfers from companies and top marketplaces in the US, UK, EU, Japan, Canada, Australia and Mexico, all directly to your Payoneer account. Basically, your receiving account acts just like a local bank account, so you’re essentially receiving an international payment via a domestic wire transfer. Simply provide the details of your accounts to your clients and then they can easily send you a payment just as if they were around the corner.
- Request a Payment – The Request a Payment service makes it simple for you to receive a payment from your client – directly from the Payoneer platform. Invoice your client a payment request and they can pay you directly online within minutes using the payment method of their choice. Have your client choose from several ways to pay you, either via local bank transfer, credit card or ACH bank debit. It’s that simple!
- Marketplaces & Networks – Receive secure payments from global companies and online marketplaces like Upwork, Airbnb, Amazon and more, as well as from thousands of Payoneer partners, directly to your Payoneer account. Just choose Payoneer as your preferred payment provider, receive funds from an endless number of companies and withdraw to your local bank account or at ATMs worldwide.
Forget leather wallets! An eWallet is an online prepaid account used to store funds needed for transfers either through your computer or mobile phone. It’s a pre-equipped electronic wallet in which you can make transactions instantly and securely in just a few clicks. Transferring funds via eWallet can be an economical method, however, you’ll need to first find out if the person you want to transfer to (or receive from) has the same eWallet account. Security, easy user experience and convenience are all reasons to consider using an eWallet.
Have an eWallet but can’t seem to get access to your funds? Find out how you can withdraw funds from your eWallet with Payoneer.
4. Personal Check
Although it’s not the quickest option, receiving a payment via a personal check is another way and in fact, it’s a preferred method of payment for many as they are easy to get in the mail and can be processed electronically. You can obtain an international check from either your bank or local postal service, but that will come with a small fee and the recipient may be charged a fee as well when cashing the check.
Gone are the days where you only had one option to choose from when receiving payments internationally. Today, with a plethora of choices out there, always make sure you are receiving funds from the correct person and keep a record of each payment received.
With Payoneer, we help streamline the process of receiving payments internationally so you can save time and focus on what’s really important – growing your business.
Ready to take your business global?
Editor’s Note: The original post was updated on 12.03.20 for accuracy and comprehensiveness.