Global payment services for small businesses: how to avoid higher fees

Global ambition doesn’t have to come at a high price - here are three international payment solutions that can help to cut the costs of doing business overseas.

No matter how small your business, it’s never been easier to reach a global marketplace of customers.

But there are hidden costs to making and taking international payments that can unnecessarily dent your margins.

You can’t avoid these fees completely, but there are a variety of global payment services that can help you cut costs without cutting your reach.

Whether you’re an importer or exporter, or have overseas customers or employees, This page will explain the best international payment solutions for small businesses that allow you to avoid higher fees when trading globally.

Why do international payments cost so much?

Traditionally, small businesses have relied on their banks to make international payments. This is expensive because the bank passes on the hidden cost of currency conversion – the difference between the exchange rate they bought the currency for and the final exchange rate – to you, on top of a host of other fees.

Indeed, banks have taken advantage of this lack of transparency to charge small businesses over the odds for international payments.

But it doesn’t have to be so expensive. Here are some ways you can avoid unnecessary charges.

Use an international business payments service

The last few years have seen a number of global payment services emerge to challenge the lack of transparency and unfair practices in the traditional banking sector.

Services like Wise (formerly ‘TransferWise’) and Worldfirst make international money transfers easy and affordable for UK businesses by allowing you to open multiple local currency accounts, send and receive money at the real exchange rate, and pay in multiple currencies from one account.

Wise claims to be six times cheaper than normal banks and gives you access to 80 countries around the world. You can also integrate with accounting software, which saves time on admin, and manage everything from its handy app, including the ability to move money between currencies “in seconds”.

A big advantage of WorldFirst is its API, which allows you to integrate the payments system into your own existing platform, giving you clients or customers access to its benefits without leaving your app or website.

Both companies charge fair and transparent fees, and there’s no need to subscribe or pay a monthly charge. You just need to sign up and add money to your account to start saving on your international payments.

Use an online payment gateway

One of the simplest ways to make and receive international payments is to use an online payment processor such as PayPal, Stripe, or Square.

Generally, you’ll only be charged a flat-rate payment processing fee and a small fee for currency conversion (depending on supported currencies).

The great thing about these all-in-one payment gateways is that, while they’re not global payments systems first and foremost, they offer a full payments solution with software and card terminals included.

We’d recommend Stripe or PayPal. Stripe supports payments in an unrivalled 135+ currencies and is available in 42 countries, while PayPal is available in 200 countries, but only supports 25 currencies.

Use the Post Office

It might seem old-fashioned compared to the latest startups in the international money transfer space, but the trusty old British Post Office actually has an excellent international business payments service.

Operated in conjunction with Western Union, the Post Office allows you to make and receive fee-free international payments in 54 currencies, and gives you access to 200 countries and more than 130 currencies through its global network.

We also like that you get visibility of real time exchange rates, so you can see that you’re getting a fair deal, and can use its currency volatility simulation tools to manage your risk.

Just visit the Post Office website and submit your details to be accredited for an account.

Next steps

You can use any of the above global payment services to avoid a tax on your international ambitions.

If you’re consistently making and receiving high value global payments, then an international payment service like Wise or WorldFirst is probably your best option, as you’ll be able to access more competitive rates. If you make international payments less frequently, it might be easier to just use an online payment processor like PayPal or Stripe.

Want to compare prices from all the best payment systems? Why not use our free comparison tool to be matched with the most suitable provider for your needs.

Simply fill in our free quote-finding form, and answer a few questions about your business (it takes less than a minute). We’ll match you with the most appropriate card payment provider.

See also: Best payment processors for UK small businesses

Henry Williams

Henry Williams

Henry Williams is a freelance journalist specialising in small business topics, such as Making Tax Digital.

Related Topics

International payments