Online payment methods that save money for business owners and contractors
August 14, 2019
When it comes to online business banking and payments, small business owners and freelance contractors have a lot in common. Since they don’t have a large pool of employees to deal with managing payments, nor a comfortable amount of cash to help cushion against potential fees, time and cost-effectiveness of payments are really of essence here.
But business payments are far from an easy terrain, especially if you’re still relying on wire transfers.
What is a wire transfer
Wire transfers usually refer to bank wires, when money is sent from the sender’s bank to the recipient’s financial institution. When we’re talking about an international wire transfer, the procedure is mostly the same, except that banks rely on the SWIFT system to send money from one country to another.
Established in the 1970s, the SWIFT system is outdated, complicated, and unsafe. Not to mention the high wire transfer fees and that you never know how long a wire transfer takes.
Also, you have to know a lot of information before you can send an international money transfer. For example, have you ever heard of a bic code? If not, you’d better look yours up asap if you want to wire transfer money to an international business partner.
No wonder if you’re worried about the safety of your money wire, or annoyed by the long wait time, the uncertainty surrounding your transfer’s whereabouts and landing time, and the ridiculously high wire transfer fees. Oh, and let’s not forget about the unfair foreign exchange rates affecting international wire transfers.
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Banks have a long history of treating small businesses unfairly. Banking products like business accounts and online payments methods are usually tailored to large enterprises. Small businesses and contractors are often forced to wait longer for a business loan (that may or may not get approved) and pay a relatively higher price for maintaining a business account.
Luckily, thanks to the rise of financial technology or fintech, small businesses and contractors looking for the cheapest way to send money can turn to new online payments solutions. If you’re still wondering how to send money online, keep reading.
Online payments at your fingertips
Online payments help small business owners and contractors save money and time, stay on top of their finances, and maintain better relationships with their business partners and remote employees. How?
Fintech payments solutions, like Veem, help small businesses and contractors send and receive fast and secure global business payments. New technologies like blockchain and a new, more client-oriented approach allow fintech providers to offer unparalleled online business services.
With most fintech payment providers, you can send or request a payment with just a few clicks. No more time spent at the bank standing in line and filling out endless forms. But there’s more.
Some platforms, like Veem, offer a seamless integration with your accounting software. This means that once you initiate a payment, send out an invoice, or receive money, your payment platform will automatically update your accounting software. You can forget about manual double entries and save even more time.
Veem also creates a personal paylink for your business. You can integrate this paylink into your workflow wherever it suits you best and simply send it to clients whenever you want to get paid.
Most banks charge international wire fees based on their internal policies. This means that in most cases, customers have no idea why a certain fee was levied upon their payment. Unfortunately, if you’re sending money overseas, all the other banks that forward your payment through the SWIFT system may levy fees on it. This includes the recipient’s bank, who will most likely charge a landing fee for receiving your wire transfer.
This results in various little fees that add up to a big one. And since nobody knows upfront how much these will amount to, you may need to send another payment if parts of the first one are gobbled up by unexpected fees.
With fintech, you can forget about this. Most fintech companies are honest and upfront about their charges, always telling the customer what to expect when they initiate the transfer. Veem, for example, even covers the landing fee if the payment is sent in a local currency.
And, since there are no additional banks participating in the process (as with the SWIFT system) you can rest assured that no unexpected costs will arise at the end.
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Fintech companies don’t use outdated systems like the SWIFT network. Instead, cutting edge technologies like blockchain allow them to offer fast and safe online payments.
Veem even provides real-time tracking, which means that you’ll know exactly where your money is and when it will arrive. This knowledge will help you plan your finances and strengthen your relationship with your business partners. Those “where is my money” phone calls can put a strain on any business relationship, however politely phrased.
But there’s more to payments than simply sending money online. This is especially true for online business startups in ecommerce where businesses want customers to be able to pay them as easily as possible.
Services like PayPal and Square have been around for a long time to help ecommerce businesses arrange their payments. If you’re sending online payments with Square, for instance, you can even build your own ecommerce website through the platform. This helps you streamline your operations and collect all aspects of your online business under one umbrella.
These providers help you cut credit cards out of the process, which will eliminate credit card processing fees, saving you even more money.
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There’s no need to subject yourself and your business partners to the lengthy, insecure, and costly bank wire process. Use a fintech provider for all your domestic and international payments and enjoy faster, safer, and cheaper transactions.