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

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.

GoCardless is a great option if you need to accept either one-off or recurring payments from abroad without paying over the odds. You can collect instant payments directly from the sender’s bank account at the real market rate, avoiding the high fees charged for card payments.

Another service is Airwallex, an online solution dedicated to helping businesses improve acceptance rates while reducing FX fees for international payments. It does this by automatically converting prices and allowing your customer to pay in their preferred local currency at checkout. You can also choose to settle their payment in the same currency to avoid conversion fees.

Alternatively, services like 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.

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.

Here are five of the best platforms for making international payments while avoiding high fees.

GoCardless

Fees: 2 per cent + 0.24 USD per transaction (conversion rate included); no monthly fee on Standard account

Conversion rate: N/A

With GoCardless you can collect one-off and recurring bank debit payments from 30 countries at the best possible exchange rate. You can access bespoke fees if you take £1m+ in annual revenue.

WorldFirst

Fees: None

Conversion rate: From 0.30 per cent

WorldFirst’s World Account allows you to collect payments in 20 currencies and from over 100 marketplaces. You only pay for the currency conversion, with rates starting from 0.30 per cent.

Revolut Business

Fees: Plans from £10 to £90/month

Conversion rate: None within allowance during market hours (0.6 per cent outside allowance, 1 per cent outside hours)

Revolut Business’ multi-currency accounts allow you to hold, send, and receive up to 30 currencies using a single platform. Each Revolut Business plan offers a no-fee currency exchange limit, allowing you to exchange up to a certain amount per month at the interbank rate. Charges apply outside these limits and outside market hours.

Equals Money

Fees: Custom

Conversion rate: Custom

With Equals Money’s multi-currency account, you can send, receive and manage 38 currencies, with same-day and next-working-day transfers available. Pricing is customised for each business. 

Airwallex

Fees: None

Conversion rate: 0.5 per cent

The Airwallex Global Account lets you open local bank detail accounts in more than 20 currencies. You can access interbank FX rates and use the Global Account alongside Airwallex’s conversion engine and multi-currency wallet.

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 GoCardless, Airwallex, or WorldFirst is probably your best option, as you’ll be able to access more competitive rates, as well as 0benefits like Airwallex’s automatic currency conversion and like-for-like settlement. If you make international payments less frequently, it might be easier to just use an online payment processor like PayPal or Stripe.

See also: Best payment processors for UK small businesses

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