Globalization and digitalization have compelled the banking and financial industries to undergo further development. With the increasing opportunities for import and export activities, the market pressure for an international payment instrument that is both easy and fast is growing. This drives the banking and financial industries to continuously enhance their international payment systems to accommodate business needs.
Not only that, but globalization and digitalization also offer opportunities for small and medium-sized business owners to market their products internationally and tap into new markets. However, these SME owners naturally require an international payment tool that is not burdensome, as existing international payment systems often impose significant fees, posing a challenge for SME owners whose businesses are still in the early stages of development.
International payment tools are not only crucial for business players. With globalization and digitalization, these systems are now essential for individuals as well. For instance, parents who wish to send money to their children studying abroad or those who want to purchase products or services online from international websites.
What is an international payment tool?
After seeing how international payment tools are needed by various parties, it's worth understanding what is meant by international payment tools.
An international payment tool is a system and method used to facilitate financial transactions between countries. Typically, these systems are facilitated by banks or other financial institutions to provide convenience for businesses to receive and send money, as well as process all financial transactions between countries and different currencies.
After understanding what an international payment tool is, it's also worthwhile to take a closer look at various methods of international payment and the benefits of international payment systems for business players.
International Payment Methods
When selecting an international payment method, several considerations may influence business players, including the regulations of the two countries involved in the business, the transaction amount, the risks associated with the transaction, and the payment agreements between the parties involved in the transaction. However, here are some of the most commonly used international payment methods:
Wire Transfer/Bank Transfer
Wire transfer or bank transfer is one of the most commonly used international payment methods. This method involves electronically transferring funds directly from the buyer's account to the seller's account through a bank or specific financial institution. Examples of popular international payment methods using wire transfer in society include PayPal and Wise. Many wire transfer service providers offer competitive and affordable service fees to increase transaction volumes, benefiting both business and individual users.
Cash in Advance
This international payment method can reduce the risk of fraud by requiring the buyer to make payment before the product or service is delivered.
Letter of Credit (L/C)
A letter of credit is issued by a bank or financial institution, providing payment assurance to the seller for a transaction requested by the buyer. This method is considered advantageous for both parties as it reduces the risk of fraud from both the seller and the buyer.
Credit Card
Credit cards are another popular international payment method. They are widely accepted, and buyers are not required to make direct payments at the time of purchase. Sellers, however, still receive payment assurance. Credit cards offer flexibility as an international payment method, but they typically come with administrative fees and less favorable exchange rates.
Escrow Account
This international payment method involves a third party, which holds the funds sent by the buyer to the seller until all business contract requirements are met. However, for this method to work, a neutral and trustworthy third party is required.
Does my business need a payment system?
After learning about various international payment methods, you might be wondering if your business needs to adopt and offer an international payment system for your customers. To help you determine whether it's necessary for your business to provide international payment methods, it's worthwhile to examine some advantages and disadvantages of international payment tools.
Advantages of International Payment Tools
If you're looking to expand your market, or trying to grow your digital business, there are several advantages of implementing international payments for your business that you can consider.
Expanding into Foreign Markets
By embracing digitalization and various international payment methods in your business, you indirectly open opportunities to reach clients or consumers from other countries. This, in turn, promotes your products or services to international consumers.
Fraud Risk Mitigation
One reason you might hesitate to expand your business internationally is the risk of fraud by unknown parties, especially when conducting transactions with clients or entities you are not familiar with. However, by implementing the right international payment methods, you can minimize these risks. If you are considering expanding your business internationally, you might want to try adopting international payment methods such as Letters of Credit or Credit Cards, which can reduce the risk of fraud by buyers.
Effectiveness and Efficiency
In the past, international financial transactions required more complex procedures. However, with the advancement of the internet, technology, and the global financial industry, international financial transactions have become easier and more affordable. Consequently, companies can implement more efficient operations and offer easier and diverse international payment options for their customers.
Shortcomings of International Payment Tools
After understanding some advantages of international payment tools, it's also worthwhile to look at some drawbacks to help you make informed decisions.
Transaction Costs
Despite some international payment methods offering competitive fees, others still impose relatively high charges. This can be a consideration and a burden for some business players, especially Small and Medium Enterprises (MSMEs), as it adds to the operational costs and makes it challenging for the offered products or services to compete with others.
Currency Exchange Rates
In international financial transactions, differences in currency values are inevitable. However, many international payment providers and methods often set relatively high currency exchange rates. This becomes a burden for business players and can impact the profits and losses incurred.
Different Regulations Applies
Each country has different legal rules and regulations, affecting the complexity of international financial transactions between one country/region and another. In-depth knowledge and research are required from business players to determine the most suitable international payment method based on the regulatory conditions in the respective countries.
Aspire Payment Gateway as an option to expand your business
As a partner in developing your business, the Aspire Business Account is designed to assist you in expanding your business to international markets by providing the convenience of opening virtual accounts in various currencies such as IDR, SGD, and USD.
Through the Aspire business account, enjoy the ease of sending and receiving international payments in a variety of currencies (up to 30 international currencies from 130 countries) on the same day, with transparent transaction fees and competitive foreign exchange rates. You also don't need to worry about hidden fees in your transactions because, by using the Aspire business account, we display all service charges and the predetermined currency exchange rates upfront, ensuring transparency in all transactions conducted through the Aspire business account.
On top of that, Aspire also offers payment gateway services where by implementing Aspire's payment gateway to your business, it allows your business to accept international payments with low and transparent MDR fees. Not only that, the payment gateway also offers various payment methods that are accepted both domestically and internationally that can be chosen according to your clients' preferences, including: Credit Card, Transfer to Virtual Account, various e-wallets, QRIS and also various other digital payment method options.
With an easy integration process and 24/7 user service via phone, chat, or email, your business can immediately accept digital payments both domestically and internationally without any worries. Want to know more about how Aspire's payment gateway can be the solution to grow your business? Learn more about Aspire's payment gateway here.
Frequently Asked Questions
How can Aspire support the unique financial needs and challenges of mid-sized businesses?
Aspire offers a comprehensive suite of expense management solutions tailored for mid-market companies. This includes sophisticated corporate cards, advanced budget controls, and streamlined claims and approval policies, all designed to enhance financial efficiency.
How quickly can a mid-market company integrate Aspire's solutions into existing systems and workflows?
Integration with Aspire's expense management solutions is swift and seamless. Mid-market companies can swiftly implement corporate cards with tailored features, set up nuanced budgets, and establish streamlined claims and approval processes, ensuring minimal disruption to existing workflows.
How does Aspire compare to competitors for international money transfers?
Aspire excels in international expense management with FX fees up to 2x cheaper than traditional banks.
Global payments are offered by various providers through business accounts. Read our article to know more about types of business accounts and how to choose the best one for your business. There are many banks and fintech companies offering business accounts to businesses in Singapore. We have covered them all in our blog, you can click the links to view accounts offered by various banks such as DBS, OCBC, Maybank etc.
However, if you are a start-up or a growing business, chances are you may not meet the eligibility criteria for most of these banks or find their charges to be expensive for your liking. You can consider opting for Aspire multi-currency account for global payments which offers you all the benefits, with eligibility criteria which are less stringent. Read our article on bank charges in Singapore for a quick and easy comparison.
What level of customization does Aspire offer to meet the specific financial requirements of mid-market clients?
Aspire understands the diverse financial needs of mid-market clients and provides a high level of customization to tailor solutions accordingly. This includes the ability to customize corporate cards with specific spending limits, rewards, and benefits that align with the unique requirements of each client.
Additionally, Aspire's budgeting features are adaptable to accommodate the distinct financial structures of mid-market enterprises. The platform also allows for fine-tuning approval policies, ensuring they align with the specific workflows and compliance standards of individual mid-market businesses. This commitment to customization empowers mid-market clients to optimize their expense management in a way that best suits their financial goals and operational preferences.
Is there a minimum balance required for Aspire Business Accounts?
No minimum balance is required to keep your SGD, USD, EUR, GBP and IDR Accounts activated.
Can Aspire's corporate cards be customized to cater to the specific needs of consulting teams on the go?
Yes, Aspire's corporate cards are highly customizable. Consulting teams can benefit from tailored spending limits, travel-centric perks, and real-time transaction tracking, ensuring that the cards meet the unique requirements of professionals on the move.
How does Aspire support budget management for consulting projects and travel expenses?
Aspire's platform offers sophisticated budget controls that consulting companies can adapt to project-specific needs. This includes setting project budgets, tracking expenditures, and receiving real-time insights to ensure that expenses align with project goals.
What are Aspire Corporate Card FX rates?
At Aspire, we want you to pay the lowest rates in the market.
- Zero card activation fees
- Zero card transaction fees
- Best FX rates, up to 2x cheaper than banks
How does Aspire help consulting companies enforce expense policies and approvals for travel expenses?
Aspire streamlines the claims and approval process, allowing consulting companies to establish and enforce expense policies seamlessly. Customizable approval workflows ensure compliance with company policies and industry regulations.
Is Aspire's platform scalable for consulting companies of varying sizes?
Yes, Aspire's platform is scalable and caters to consulting companies of all sizes. Whether you're a boutique consultancy or a larger firm, the platform's features can be adapted to meet your specific travel and expense management needs.
How can I open a business account in Singapore?
For a business account in Singapore, Aspire is an excellent choice. With a focus on startup and SME needs, Aspire offers a seamless and transparent banking experience.
Benefit from their user-friendly online platform, no minimum balance or account opening fees, and dedicated support for businesses of all sizes.
Aspire is designed to streamline your financial management, making it an ideal partner for entrepreneurs in Singapore.
How long does it take to open an Aspire business account?
Registration with Aspire takes less than 10 minutes which you can do via our website or mobile app.
Once registered, we will get back to you within 5 business days on whether your account has been activated or if we need further documents from you.
Our account verification process varies according to the nature of your business. In exceptional cases, it can take up to 7 days to process your documents.
How can Aspire's corporate cards benefit my startup?
Aspire's corporate cards offer a range of benefits for your startup. Earn 1% unlimited cashback on qualified spends, simplify expense management, enjoy streamlined transactions, and gain real-time insights into spending. With customizable limits, integration with accounting software, and enhanced security features, Aspire's corporate cards are designed to empower your startup's financial efficiency and provide added convenience for your team.
Is Aspire suitable for both early-stage and established startups?
Absolutely, Aspire caters to the needs of both early-stage and established startups. Whether you're just beginning your entrepreneurial journey or have an established business, Aspire offers tailored financial solutions to help streamline your operations.
From managing expenses and optimizing workflows to providing valuable financial insights, Aspire's platform is designed to adapt and scale with your business as it grows. The flexibility and scalability of Aspire make it a suitable choice for startups at various stages of development.
Is there a minimum balance required for Aspire Business Accounts?
No minimum balance is required to keep your SGD, USD and IDR* Accounts activated.
However, we recommend keeping your subscription plan amount available on your balance to ensure you're up to date with your payment every month.*
To create a recipient or make any transaction on your IDR Account, you'll need to have a minimum balance of IDR 10,000 on your account.
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