Best Ways to Receive International Payments As An Agency
Over the last few years, digital has not only proven to be a frontier for agencies to churn out new products and services but also enabled them to expand their horizons. As per an industry forecast, the Indian ad industry is expected to grow by a whopping 20% in 2021 – something that won’t be possible without international expansion.
Today, it is a norm for many reputed agencies to have popular international brands as clients. And why not? Sharing and executing creative ideas and storytelling does not require any cross-border permits or licenses. Even individual creators and freelancers have started venturing into the overseas markets to bring aboard promising work from international clients.
Regardless, for agencies and professionals who have just entered into the global territory, navigating the web of real-time cross-border payments can be a real task. At the end of the day, their objective is to receive the complete payments on time, and in a secure and seamless manner. So, what are the various options that agencies can consider to receive international payments, and which one should they ideally go for? Let’s explore below.
1. Money transfer via bank – The most traditional way to receive cross-border payments would be a bank-to-bank transfer. In this method, your clients have to simply wire the payment to the account mentioned on the invoice you provide them with. Although quite reliable, you will have to bear the brunt of intermediary fees and undisclosed foreign exchange rates – something that your client will not account for. Another roadblock of this method is the complexity of reconciliation in case your agency has multiple international clients.
2. Payment via credit card – Credit cards enabled with international transactions offer great convenience and swift payment flow from your clients to your agency. Through this method, clients can make payments instantaneously over their phones or workstations. However, one will have to take into account the processing as well as foreign exchange fees that are usually as high as 3-5%. Additionally, with cyber-attacks becoming increasingly common, there’s always the threat of digital theft and fraud. You also have to be wary of disputed charges and chargebacks to the sellers.
3. Payment via e-wallets – Although not strictly a cross-border payment technique, e-wallets are growing in popularity as some of them allow the flexibility to carry out safe and secure transactions from the client’s wallet to the agency’s wallet. Certain e-wallets allow multiple currencies as well. Ultimately, e-wallets are only convenient for minor payments, and eventually, your agency will have to transfer the funds from its wallet to the bank account – which makes the technique a bit cumbersome.
4. Payment to foreign bank account – Another good option, especially if your clients are concentrated in one country, is setting up a foreign bank account for all payments. This way, the payments you will receive will not have to deal with any foreign exchange rates or additional charges that are usually levied upon real-time cross-border payments. On the flip side, you will have to eventually transfer the payments to your agency’s domestic bank account, while also take up the responsibility of managing a foreign account.
5. Payment via digital escrow – Lastly, the final option agencies can consider for real-time cross-border payments is digital escrow. This is an extremely trustworthy, secure, and swift means of payment transfer wherein the amount is stored in a third-party escrow account recognised by the regulators of its country of origin. Additionally, the transaction terms are decided by both the international client and the agency. Thus, what makes digital escrows such as Tazapay so convenient is that payment is only released when both parties have met their terms of the agreement. Therefore, once your agency furnishes proof that the work has been delivered, the payment is reflected in your account. This way, both the agency as well as the client are protected against issues such as the client’s ability to pay or the agency’s inability to fulfil contractual obligations. Moreover, Tazapay also offers complete transparency, a flat 1.8% processing fee capped at a particular amount, zero hidden charges, and industry-leading foreign exchange rates.
As you’ve read, there are numerous options to consider for receiving international payments from clients. While the likes of credit cards provide speedy payments with the caveat of the high processing fee, digital escrow like Tazapay facilitates secure and convenient payments with utmost transparency. Therefore, going over your requirements and matching them with the USPs of each method will help your agency determine the most relevant one.
Best Ways to Receive International Payments As An Agency
The pandemic has changed the way businesses interact financially giving way to a more digital route for B2B payment methods. Modes of B2B payments such as cash and cheques were going down and being replaced by other modes of payments such as credit cards, opening an escrow account, wire transfers, and other online modes of B2B payments. This digital trend is only growing by the day and appears to be staying on for a while. Having said that, the B2B payments landscape, especially internationally
When one expands globally, it is a very fulfilling and exciting time for the business. However, this growth also presents its own set of challenges. Cross-border payments, invoicing, and getting international clients to pay on time can be a bit of a tedious task. Invoicing is the concluding activity before the payment is received in the entire cycle of the trade. We often strategize on how to deliver the product and how to receive the payment but we tend to neglect this crucial invoicing step f