Our "Learn More" series provides businesses with an introduction in subjects of foreign exchange and international payments.
✔Wire transfers from bank account to bank account can be conveniently made online directly from PC or mobile device. Physical cash can be wired through a bank or wire transfer operator directly into a bank account. No need to use time-consuming and manually intensive checks.
✔Foreign exchange can be integrated with the wire transfer process – no need to keep accounts in multiple currencies.
✔Funds are delivered securely to international customers, typically within 1-4 business days using the Federal Reserve’s Fedwire real-time gross settlement (RTGS) system. Funds are delivered to US customers on the day they are sent.
✔More widely accepted internationally than credit cards, especially by smaller businesses and individuals.
✔Can work out cheaper than accepting credit cards.
✔Potential for integration with invoicing, cash flow management and accounting software.
"SWIFT Payments are one of the most popular methods to send funds from one country to another, and are a relatively fast method in conducting international wire transfers. Weighing factors such as ease-of-use, security and payments fees can help companies create strategies around their use of SWIFT Payments for day-to-day business.” 1
✔Have suppliers, employees or contractors in foreign countries who need to be paid in local currency.
✔Want to be able to accept payments in foreign currencies to make their business more attractive to international customers.
✔Want to establish new business relationships in foreign countries without having to set up accounts with local banks.
✔Want to have full control over the timing of payments in order to manage cash flows efficiently or mitigate FX risk.
✔Need the certainty that urgent payments in US dollars will settle within a few hours.
✔Want the peace of mind that comes from using a trusted intermediary for large and international payments.
“Today, any person or business in a developed economy can wire money online – easily, quickly and economically. That activity is made possible, in part, by important new rules and standards established late in the 20th century to streamline electronic funds transfer processes and help make them more secure.” 2
✔Although wire transfer operators can handle currency conversion, there may be no opportunity to lock in FX rates ahead of payment, so there may be unforeseen FX gains or losses.
✔Wire transfers can incur fees for both the sender and the recipient.
✔International wire transfers can arrive several days after they have been notified to the recipient. The exact period depends on the country and the receiving bank’s terms of business.
“Balancing your needs and those of your customers can be tricky. Technology can help you manage cash flow and FX risks more effectively while providing a wide range of customer payment options.” 3
With 17 years experience in the financial industry, Frances is a highly regarded writer and speaker on banking, finance and economics. She writes regularly for the Financial Times, Forbes and a range of financial industry publications. Her writing has featured in The Economist, the New York Times and the Wall Street Journal. She is a frequent commentator on TV, radio and online news media including the BBC and RT TV.
1. SWIFT Payments Explained - https://www.americanexpress.com/us/foreign-exchange/articles/swift-payments/
2. The Emergence of Electronic Funds Transfer and its Role in Wiring Money Online - https://www.americanexpress.com/us/foreign-exchange/articles/role-of-electronic-funds-transfer-in-wiring-money-online/
3. International Money Transfer - Incoming Payment Options For Suppliers - https://www.americanexpress.com/us/foreign-exchange/articles/international-money-transfer-for-suppliers/