No matter how big or small your business is, money transfer is an everyday part of operations. You’re spending money on everything from marketing to materials, and money is coming in from every sale and deal you close. The ability to transfer money to wherever it needs to go is imperative, and can ease the headaches that can sometimes come with cash flow. Safe and reliable money transfer for business needs to be a top priority.
Most business owners reading this will think to themselves “I already have systems in place to transfer money.” Of course you do—that’s a cornerstone of business operations! The question is, are those systems efficient, transparent, and reliable? Chances are, you’ve had trouble transferring money in the past. If that’s the case, it’s important to explore beyond traditional bank transfers and cashiers’ checks. Here’s how to simplify money transfer for business for the new age of global commerce.
Traditional means of money transfer
Before we dive into how to improve money transfers, let’s first look at how most businesses transfer money on a daily basis:
- Bank transfers are very common, but can come with some issues if you’re transferring funds internationally. For starters, you’re likely paying an inflated exchange rate that you have no control over. It’s also impossible to track funds during transfer—you only get an ETA while the antiquated SWIFT system handles the transfer. Bank transfers are also impossible if you’re sending funds to a recipient that’s not banked traditionally.
- Wire transfers are near-instantaneous and extremely reliable, but you’re going to spend a significant amount of money to facilitate these transactions. The costs can be enough to handicap small businesses working to grow internationally. And again, if you’re dealing with unbanked recipients, wire transfers aren’t viable.
- Check or money order are relics in a larger world of global money transfer. Not only will snail mail not cut it in an age when accounting happens in real-time, they might not be welcomed by your recipient. In foreign countries especially, check and money order payments could draw scrutiny as scams or fraud attempts, even when the funds are legitimate.
These three modes of money transfer are cornerstones for many businesses because they’re the norm. It’s easy to send a bank transfer from your checking account or wire money to a vendor through your bank. But just because they work doesn’t mean they’re efficient in the modern age.
Why do traditional transfers fail?
Remember that time your bank didn’t process your funds transfer for an arbitrary reason? Do you recall the time when your recipient claimed they never got your money order in the mail? It’s happened to the best of us, and when it does, it puts a halt on your business. That’s money you accounted for in accounts payable, but now it’s in limbo and you can’t reconcile your books until it’s taken care of.
The fact is, traditional money transfers fail often. Here’s a look at some of the reasons banks stop payment or recipients aren’t able to access their money:
- Transfers get flagged as “suspicious” activity based on the recipient’s destination
- Physical forms of payment get “lost in the mail” or even stolen upon delivery
- Insufficient funds in an account can negate a wire or bank transfer
- Double processing can halt both transfers so that neither goes through
- Problems with the recipient’s banking institution can rebound funds back
The fact is, traditional banking institutions need to protect themselves against fraud and/or liability. If they believe there’s even a small chance of either, they’ll shut down your transfer—even if it’s legit. When that happens, you’re left to deal with the consequences.
A better way to transfer funds around the world
Businesses looking for the most efficient way to transfer funds around the world need to look beyond traditional banking options, at digital payments instead. Digital payment platforms like Veem offer a new way of transferring funds: one that’s transparent, efficient, and affordable.
With Veem, businesses set up a digital wallet and send funds to other wallets. There’s no banking information needed—only the email of the recipient. During transfer, both business and recipient are able to see exactly where the funds are and when they’ll become available. Moreover, if there’s any currency exchange, it happens at the lowest possible rate. Best of all, there’s no reason to think your transfer will get flagged or stopped for activity that’s valid.
As you consider cash flow and your balance sheet, make it a point to think about money transfer for business. Traditional means may keep money flowing in and out, but digital payments could facilitate transfers even more efficiently, to give you newfound control over your cash flow.