Due to lack of technology integration, making international payments can take significant time with manual processes to issue payments, reconcile payments and resolve errors when paying overseas suppliers through your traditional brick-and-mortar bank.
Let’s think for a second about the amount of transactions an international organisation would process on a monthly basis. With just a couple of overseas suppliers, or using the services from another international firm, the figure can quickly accelerate to hundreds, thousands and tens of thousands of cross-border payments.
There is an easy solution to managing international invoice payments. Ensuring the amount sent always matches the amount received overseas by your beneficiary and further, managing the VAT reclaim on each of these payments. But firstly, let’s examine the traditional way to pay overseas invoices.
How do you send payments through the traditional banking network?
Banks charge hefty fees for international transactions, with beneficiaries often waiting days rather than hours to receive their payments. This causes an international payments headache, with many pain points along the payments journey. Companies are required to book a single international payment instead of multiple payments at once. Then, they must reconcile with the traditional bank involved in processing and delivering the payment.
Finally, your overseas beneficiary may have to pay a receiving fee when settled with their funds.
Multiply this granular payment problem by the hundreds and thousands of international payments processed annually and you have one complex international payments process.
How is my money delivered to international suppliers?
There is a lengthy lead-time between submitting an international payment and your beneficiary receiving the funds overseas. This is due to there being no traditional direct route between point A and point B. There are many stops on the payment journey with multiple parties in the critical path – and yes, you guessed it, each intermediary bank takes a cut from the total transaction amount booked for their services. This can result in beneficiaries not receiving the full amount they are owed.
How does the traditional payments process account for FX rates?
With the traditional process, you can run into an exchange rate mark-up. These deductions are known as handling fees, international sender fees and international receiver fees. Charges by each bank in the critical path will result
in significant deductions from the amount sent. Once totalled up, this means that the amount you have sent will not be the amount received by your overseas beneficiary. There is also the issue of unreasonable currency exchange rates undisclosed before payments are booked. The higher FX rate is usually to account for the conversion cost.
Are you sending money internationally? PaymentsHub could save you time and money.
TransferMate is beginning to reshape the face of international invoicing through its seamless payments platform, PaymentsHub, fully integrated within the SAP Concur App Store. PaymentsHub ensures that the amount sent equals the amount received and allows users to book up to 10’000 payments at a time. Better yet, once all payments are booked, PaymentsHub will calculate the sum of the total transactions into one local amount for you to pay. PaymentsHub will then process and pay out all your invoices across multiple countries in each local currency.
Businesses can make ONE local payment, which fulfils up to 10’000 invoices in multiple currencies. There are no handling fees, no international sender nor international receiver fees with payments delivered overseas within 48 hours.
PaymentsHub is an invoice payment process and VAT recovery solution powered by TransferMate Global Payments and Taxback International. PaymentsHub is available via the SAP Concur App Center providing SAP Concur customers with a better way to pay invoices with the unique value add of maximising your VAT recovery simultaneously.
Find out more in our next PaymentsHub blog. In this three-part series, we’ll be highlighting one of the many problems PaymentsHub solves.
