You’ve hired an independent contractor based internationally and they’re doing great work for your business. Now, the time has come to pay them. How? It seems like every function of your business is digital these days, but can you pay international contractors online?
The answer is yes! Paying international contractors online, while new, is one of the easiest and cheapest ways to send money to a global workforce. Digital payments outperform traditional forms of payment in every way. Here’s a look at how traditional international payments work, what digital payments are and how they stack up against each other.
Traditional ways of paying global contractors
In the past, businesses had to rely on traditional banking institutions to pay people in other countries. These institutions provided three ways to make international payments: bank transfers, international money orders and wire transfers.
- Bank transfer (SWIFT): The Society for Worldwide Interbank Financial Telecommunications (SWIFT) is a network of participating banking institutions from all over the globe. When you send a bank transfer through SWIFT, the money moves from one bank account to another through a series of global transactions. To send an international bank transfer, the origination bank and the recipient bank need to be part of the SWIFT network. Transfers take a few days and are accompanied by both transfer fees and exchange fees, when converting to another currency.
- International money order: Just like a typical money order, you can send an international money order. International money orders are a rather archaic form of payment. Not only are they expensive and painfully slow, the number of countries and vendors that accept international money orders is decreasing. They’re quickly becoming outmoded and even treated as suspicious.
- Wire transfer: Few popular options for wire transfer exist outside of the SWIFT network. It’s easier when wiring money within the same banking institution, but banks with international branches are few and far between—not to mention there’s no guarantee your contractor will have access to one.
All these means of sending money require that the recipient have access to a traditional banking institution. Not only are traditional ways of sending money costly and inefficient, it might not even be an option when you are hiring unbanked contractors.
These days, many international contractors would rather receive money online than through a banking institution. A digital wallet is an accessible way for anyone with internet access to send and receive money and the best way to send money online.
What’s a digital wallet?
Digital payment platforms compete with the complicated, slow and expensive international transfers of old. They do this by providing users with digital wallets: online services that enable electronic transactions.
New digital payment companies, like Veem, provide users with digital wallets so users can send and receive money online without going through a bank. A digital wallet can also store payment methods; with a digital wallet, you can send money you already have in your digital account, in a bank account or even from a debit card.
Digital wallets also keep track of your payments in a way that makes record keeping a breeze. Most important, they enable global tracking of funds, to ensure they’re received in a timely manner, by the right party.
The benefits of digital payments
Digital wallets are hyper-flexible payment methods, as well as incredibly secure. With a digital wallet, you don’t need to get the banking information from an intended payment recipient. In fact, your recipient does not even need a bank account to receive money! All you need to start sending money is an online identifier for the contractor—usually their email address.
Digital wallets make it easy to instantaneously send money and monitor payments. Digital payment platforms are incredibly simple to use and have competitive pricing that beat traditional banking services—especially when it comes to international payments.
Digital payments have made the world smaller
Digital payment platforms make paying international contractors online as easy as, say, Venmo-ing a friend for brunch. Digital payment platforms like Veem service countries around the world and can exchange currency quickly to ensure lower landed costs for contractors and businesses—no matter where they are in relation to one another.
For businesses looking around the globe for talent, retaining that talent means getting them paid on-time and in-full. With digital payment solutions, a few clicks is all it takes to send payment across the world, directly to the person doing the work. Best of all, creating an account with Veem is free, and costs independent contractors absolutely nothing to receive payment.