When businesses need to send or receive money internationally, they have a few options. They can use a bank wire transfer, an international money order or a digital transfer platform, among other modes of transfer. Each method has its own benefits and drawbacks, so it’s important to understand the differences before choosing the right one for your B2B funds transfer needs.
Before delving into how to send money from your business to another organization abroad, it’s best to understand what an international B2B money transfer is. Here’s a closer look at the concept and the steps that go into moving money across borders.
What is an international transfer?
An international transfer is the process of sending money from one country to another. It’s usually a function of international commerce: buying or selling goods and services between businesses around the world.
For example, if a United States company buys raw materials from a supplier in Bangladesh, they need some way to pay for those materials. International funds transfer is the answer. This type of transfer allows the U.S. company to convert currency (in this case, USD to BDT), send the money from a domestic institution to one abroad, and ensure the Bangladeshi company receives what it’s owed for goods provided.
These types of transfers happen every second of every day as the global economy grows. They’re a necessary part of doing business abroad.
What is a B2B money transfer?
A B2B money transfer, or business-to-business money transfer, is an international transfer that involves two organizations. One business wants to send money to another, and both parties need a way to facilitate the transfer. Domestically, it’s often as simple as an ACH bank transfer; internationally, there’s a little more work involved.
The nature of a B2B money transfer largely revolves around the facilitating service. For example, in traditional bank transfers, the banks handle all of the actual money movement—all businesses need to do is set up payees. However, as digital B2B payment options become more robust, solutions like digital wallets are putting the power to move money back in the hands of business.
What modes of B2B money transfer are there?
There a few different methods for transferring B2B funds internationally. The method you choose will depend on your business’s needs and preferences:
- Wire transfers: These involve sending money directly from one bank account to another across international borders. Wire transfer fees and times vary depending on the bank, but they’re a quick and convenient way to send funds internationally. The downside? They’re also expensive, which makes them cost-prohibitive.
- SWIFT: The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is an international messaging system that allows banks around the world to exchange information about payment transactions in a secure fashion. It’s used most often to send international payment orders.
- Digital Payments: Digital payment platforms like Veem use digital wallets to facilitate funds transfers from one business to another. Companies load money into their wallets, select currency preferences and send funds in just a few clicks. Funds are traceable from one destination to another, and businesses can even automate payments.
While there are other modes of B2B international funds transfer, these three options represent the predominant modes of sending money. They’re often situation-dependent, although as we’ll see in a moment, one option does stand apart from the rest in the modern age of global commerce.
The best way to transfer money internationally
There are a number of ways to transfer money internationally, and each method has its own benefits and drawbacks. So, which is the best way to transfer money internationally for your business? The answer is increasingly digital payments. Here’s why:
- Digital payments are fast. They combine the relative speed of international wire transfers with a level of transparency that wires simply can’t offer.
- Veem and other platforms offer better currency exchange rates, which reduces confusion about how much money is actually transferred in foreign denominations.
- Digital transactions are traceable in a way SWIFT transactions aren’t. Banks provide an audit trail, but there’s no true way to track funds in transit.
Digital payments make international B2B funds transfers simpler
One of the most important aspects of international business is maintaining a strong, clear and consistent payment relationship with business partners. When it comes to transferring funds internationally, one solution stands out as being the easiest: digital B2B money transfers using Veem.
If your company needs help setting up an efficient and easy-to-use payment system for international transactions, we’re here to provide assistance! Schedule a demo today to learn more.