Business Money Transfer — What Are Your Options?

Optimizing Business Money Transfers: Tips & Modern Options

These days, you can expand your business beyond borders without prohibitive costs. You can hire freelancers from other countries or outsource certain processes to cut back on expenses. Such changes in your approach will mean money transfers to meet your financial obligations.

What’s a Business Money Transfer?

A business money transfer is moving corporate money from one account to another. The financial transaction can take place between two different accounts in the same bank, from one bank to a different bank (interbank transfer), and from a local account to a foreign account (wire transfer sometimes between two accounts of the same person; remittance usually between two separate account holders), among others. 

Although transfers are for the payment of goods and services, they can also be for investment or financial planning purposes.

A wire transfer is recognized as a safe option for moving large amounts of money. Banks use codes, such as Society for Worldwide Interbank Financial Telecommunication or SWIFT and Business Identifier Code or BIC (both route messages between banks and financial institutions), and International Bank Account Number or IBAN (specific to direct transactions to a particular bank account) to ensure transfers are carried out in a secure path.

Modern Money Transfer Services

Your business has several money transfer options, other than the commonly used wire transfer, which can typically take five days for international transactions. Innovative technologies in the finance sector have led to the development of digital business money transfer services, which can process transfers faster.

These services provide a platform that allows companies to move money or send payments in a speedy, secure, and transparent manner. You can track your funds, send money in a variety of currencies, and choose how recipients can access the funds you send. This type of money transfer is suitable for large amounts of money on a long-term basis.

Another option to transfer money is through peer-to-peer (P2P) platforms, which come in the form of apps or websites. You can pay vendors, suppliers, or other individuals directly. Simply log in and enter the pertinent information (e.g., recipient’s email or phone number, amount, etc.), and the payment will go to that person’s bank account, debit card, or P2P account. 

The drawback to a P2P payment is it’s not suitable for large amounts and international transfers, unlike a digital money transfer service or a wire transfer from a bank. But this relatively new form of money transfer is ideal for people who may not have a bank account.

Tips for Better Corporate Money Transfers

The digital economy allows businesses to manage the costs of payments for efficiency and profitability. You can optimize each transaction, so you can manage resources while still meeting your financial obligations.

Consider the following ideas to manage and minimize the cost of money transfers for your business.

Understand what factors affect the cost of transfers.

Every money transfer comes with applicable fees. These fees will vary depending on the amount you’re going to send, where you’re going to send it, and which money transfer method you’re using.

In general, the following costs will come with your corporate money transfer:

• Service Fee

Transaction fees are standard with every service. Most will charge a fixed rate and some will charge a percentage of what you’re going to send. 

• Foreign Exchange Fee

When you’re making payments in another currency, the money transfer service will charge a fee for currency conversion. How much you pay will depend on the foreign exchange rate on the day of transaction and if the service has a markup.

• Bank Fee

Some banks will charge an additional fee when initiating or receiving money transfers, affecting the overall cost of your transaction.

Compare fees.

Much like vetting vendors or suppliers for your business, you’ll also want to vet the money transfer services you’re considering. 

Which one offers the best rate? Is there an introductory rate or discount for new transactions? Are there other fees that might not be so prominent, like intermediary bank fees (i.e., when the transfer goes through other banks before reaching the receiving bank)?

Ask each service to specify what fees will be tacked onto your money transfer. Transparency is key here, so pick the one that’s going to be as detailed as possible.

Learn about the security measures each provider applies.

How secure will your transfers be with a certain provider? A secure transfer will have adequate protection against fraud and be processed with advanced encryption.

Determine which takes priority: speed or cost.

Are you more concerned with the recipient receiving the payment quickly than the cost of the transfer? If that’s the case, then all you need to focus on is a service that can guarantee swift transfers in a secure way.

Other considerations for choosing your money transfer service and method are the convenience of sending and receiving money, and access to customer support. The former should allow you to do online as well as onsite money transfers. Your recipients should also be able to get their payments digitally or physically.

When your business expansion involves money transfers, locally or internationally, weigh your options carefully. With a considered approach, you’ll be able to manage the cost that comes with these financial transactions.