For exporters, having the proper infrastructure to receive payments from global customers is vital. Yes, there are many factors that require the exporters’ attention, like finding the right trade finance solution, ensuring continued operations, liaising with shipping agents, and more, but having the right payment solution is critical, too.
Other factors include making the right choices for your inward remittance platform, like LeRemitt, or availing yourself of post-shipment finance, but the starting point should be the payment solution.
Let’s examine the factors to consider while selecting the payment solution for your export business. The logical process for choosing the right payment solution will follow the same flow as starting your export business.
How do you select the right payment solution for your export business?
Study the target market
When you start your export business, you have to study the target export market to understand if your product will sell well there and whether the rules and regulations of the market are conducive to trade. To select the right payment solution, you will include the following:
- Your payment solution must support the importing and exporting countries’ currency and provide competitive exchange rates
- Check if the target market finds your payment solution easy to use and accepts it as an option
- Ensure the payment solution complies with the regulations applicable in the local and global markets
Compare payment methods
Thanks to technology, we can transfer and receive funds quickly, securely, and efficiently. The exporter must evaluate the various methods available to make the right choice.
Common choices include:
- Payment gateways like PayPal Stripe are ideal online transactions that aim for quicker settlements
- Bank transfers can be slow and expensive but are best suited for larger transactions
- An open account is only suited for clients with whom you have a long-term relationship; it offers a great deal of flexibility
- Letter of credit is a secure choice for large-value transactions and helps when you are dealing with new buyers
- Escrow services provide security to sellers and buyers when their dealings are just getting started
Focus on the security aspect
Look for solutions that offer maximum security to protect you from fraud. Features like one-time passwords, two-factor authentication, and encryption to secure your transactions are vital.
Evaluate for fees and costs
While many payment solutions are available in the market, there is an added cost factor to this. It is critical to consider the fees the solution charges to ensure you control your costs. Here’s how you can evaluate for costs:
- Check the subscription fees, transaction costs, hidden charges, and exchange rate margins
- You can negotiate with the solution provided to reduce the charges if your transaction volume is high
Look for scalability and integration aspects
As an exporter with a running business, you likely have various solutions to help you manage documentation, invoicing and collections, payables, logistics, and more. It is essential to check if your payment solution can:
- Integrate with your existing business systems, ensuring that there is one right source of truth and all information is updated in real-time
- Check if the payment solution can scale along with the growth of your business to handle the increase in transaction volume
Processing time
Check the processing speed of the payment solution to ensure continued cash flow and minimum disruption of normal accounting operations.
Customer support
When selecting a payment solution, uninterrupted customer support is critical to resolving issues quickly. 24/7 support will help resolve issues across various time zones.
Business analytics and reporting
Your payment solution should enable you to examine analytics like transaction volumes, insights on processing time, and customers and banks from where the funds are received. This will enable you to generate reports, forecast future volumes, and manage finances well.
Evaluate the fintech factor
Look at innovative platforms like LeRemitt to manage multi-currency payments to ensure secure, quicker, and cost-effective cross-border transactions.
Check reviews and case studies
While selecting the payment solution, it is critical to gain realistic insights into its performance. Ask the vendor to provide case studies and user reviews.
What are some popular payment solutions exporters can consider?
Here are some options to consider:
- Payoneer is a solution that suits small businesses and freelancers
- Wise is a payment solution that offers cost-effective international transfers
- Stripe is a solution that supports online businesses that have global customers
- OFX offers low transfer fees for firms dealing with international customers
- Banks are suitable for companies with long-term relationships with global clients
As an exporter, choosing the right payment solution, an innovative inward remittance platform, and documentation support is critical to ensure seamless operations. At LeRemitt, we can help you with inward remittance, documentation, and much more. Click here to connect with us and learn more about how we help.
