Learn what an international wire transfer is and how it can be used to pay overseas employees.

Remote work has become so popular that it’s common for businesses to need to make international money transfers to pay remote workers. However, whether it’s to suppliers, gig workers, employees or anyone else, disbursing funds internationally can get expensive – and quite complicated.

While there are many ways to transfer money internationally, an ‘international money transfer’ is typically used to refer to an international wire transfer from your bank account to your recipient’s bank account.

So what is an international wire transfer? And how can it be used to pay overseas employees?

How an International Bank Transfer is Used for Overseas Payments

When your business sends an international bank transfer, the money leaves in your currency and has to get to the recipient in their local currency. 

Popular international online payment systems for overseas payments include credit cards, global ACH, ​​ checks (in the United States), real-time bank transfers, money transfers, digital wallets, and international wire transfers. Small businesses and B2B enterprises will typically use different payment methods depending on their needs, locations, customer preferences, transfer volume and frequency and other factors.

Making international payouts to employees and contractors comes with complexities, so it’s essential to understand the pros and cons of international money transfers.

What Are the Pros and Cons for International Money Transfers?

The wire transfer is reliable, globally recognized, and popular, sending large sums of money. Wire transfers are often favored for significant expenses when speed is critical, especially for cross-border and international B2B Payments. 

Pros of Wire Transfers

The most important benefit of a wire transfer is speed. Wire transfers occur more quickly than ACH payments, while still being able to satisfy payments of a large size. Wire transfers (also known in the banking industry as “rails”) are widely used globally. With a wire transfer, you can use your bank and directly pay your recipient in their bank account. They are also highly secure payment method.

Cons of Wire Transfers

In exchange for speed comes increased cost. Depending on where your money gets transferred, numerous intermediary banks may be involved — and each of them will deduct an international bank to bank transfer fees.

Another factor is speed. A wire transfer will typically be sent from your bank account to your recipients via the SWIFT network. If you’re wondering about your international wire transfer time, these SWIFT transfers aren’t necessarily the fastest way of transferring money despite their name.

While international wire transfers are a reliable way to transact large sums of money, there are costs associated with doing so, like swift wire transfer fees or foreign bank transfer fees. For this reason,  international wire transfers are only one of several payment methods that businesses should be equipped to use.

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How do International Money Transfers Work?

International money transfers can be a relatively simple way of paying your overseas workers. They let you send significant amounts of money at once and convert the funds to foreign currency as needed. Here’s how the process typically works:

Step 1: Collect the Necessary Information

What details do you need for an international bank transfer? You’ll need a quite a bit! You’ll need to be ready with all kinds of financial information about your recipient including:

  • The recipient’s full name and address 
  • The amount of the wire transfer
  • The name and address of the recipient’s bank
  • The recipient’s bank account number and account type
  • The recipient’s bank routing number
  • The recipient’s bank’s SWIFT or BIC code (when applicable)
  • The reason for the transfer

Be sure to double-check your recipient’s information to avoid any unnecessary complications.

2. Choose How Much to Send – And Figure Out Your Cost

Decide how much you want to send. Then be sure to check how much your provider will charge in upfront fees, and tell you when your money should arrive.

3. You May Need to Verify Your Identity

For some currencies, countries or large transfers, your provider may need a photo of your ID or other proof of identity to keep your money safe and protect you from fraud.

4. Pay Your Transfer

Finally, you’ll need to pay your transfer! Now that your wire transfer is on its way to your recipient, simply wait a couple of business days for your transfer to arrive.

Are International Money Transfers the Best Way to Pay Overseas Workers?

While international money transfers can work for some businesses, there’s no escaping the fact that the costs of international money transfers can be expensive. And there are additional considerations for B2B transactions, which are generally dealt with via invoices and consist of more significant amounts of money. 

This adds to the time taken from invoicing to the payment being made and can come with even more hidden costs in the form of the extra time to manage invoicing and payments processing.

There’s a Better Way to Pay Remote and International Employees

Businesses using international employees and contractors want to pay them quickly, in their own currency and without extra fees shouldered by the employee. 

Businesses often go out of their way to keep the payment process smooth and painless for their international employees and contractors. With the world’s largest local payments network, Rapyd lets businesses pay workers, contractors, and suppliers faster, using their preferred payment methods and in their local currencies with the world’s largest local payments network. And with often lower fees than other providers, Rapyd lets you keep costs low while keeping your global workforce happy too. 

Save Money on International Payments with Rapyd

Rapyd Disburse lets businesses use global bank transfers, digital wallets, cash and other payout methods to scale their global workforce. 

By cutting down on the costs involved in international money transfers, businesses can save time, money and resources with Rapyd Disburse. Manage your international payments with a streamlined international transfer solution.

Choosing Rapyd means you’ll get the speed and security you’d expect when making domestic payments, all while building your international business. 

Photo by Andrea Piacquadio on Pexels

Save Money on International Payments with Rapyd

Rapyd Disburse lets businesses use global bank transfers, digital wallets, cash and other payout methods to scale their global workforce. 

By cutting down on the costs involved in international money transfers, businesses can save time, money and resources with Rapyd Disburse. Manage your international payments with a streamlined international transfer solution.

Choosing Rapyd means you’ll get the speed and security you’d expect when making domestic payments, all while building your international business. 

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