With international teams, vendors, and partnerships playing an integral role in modern business, companies need a simple, reliable way to execute foreign transactions.
Cross-border payments are becoming an essential part of doing business as companies increasingly take their supplier bases overseas, expand their operations to international markets, and recruit remote teams and partners from across the world.
In this article, we explore common ways and reasons businesses spend internationally, the fees legacy banks typically impose on cross-border payments and services, and how Rho is striving to make global payments easier and more accessible through our automated, fee-free platform.
Use cases for global payments
Several factors, including easy access to virtual communications, increasingly dispersed employees, and greater numbers of multinational organizations, have created a globalized business landscape that shows no signs of slowing down. As a result, even small companies are handling global payments as an integral part of their day-to-day practice.
Common scenarios where a business may need to issue global payments include:
- Hiring international contractors:The digital marketplace—not to mention growing gig and freelance economies—has made it possible for companies to contract independent workers based anywhere in the world. Hiring from a larger talent pool can bring great business value and shouldn’t be hampered by the inconveniences and bank fees that often come with paying employees abroad.
- Spending on business travel:If a good chunk of a company’s budget is allocated to international travel and overseas purchases, they may face transaction fees and high foreign exchange rates for all expenses made outside their country of residence.
- Procuring materials from global merchants:Any time an online purchase is processed through an overseas vendor, a company may be charged a foreign transaction fee. Often, these materials are hard to source domestically and can only be found from an international supplier.
For a business that encounters one or more of these scenarios regularly, the costs associated with servicing, coordinating, and executing global payments can add up quickly.
But what exactly are those costs, and how do they impact a company’s operations and bottom line? We’ll cover that next.
How traditional global payments deplete time and capital
Whether high-growth or mid-market, business teams strive to make every dollar and hour count. But how often are they needlessly spending their resources on global transactions?
Here are three important ways global payments can eat into a company’s time and budget:
- Global payment fees:Wire transfers are the most common method for international transactions, especially for larger sums. As with ACH transfers, some banks impose a service charge to initiate a wire, and the fees for an outgoing international payment typically range from $35 to $50. When applied to many global vendors, that’s hundreds or even thousands of dollars in fees down the drain.
- Foreign transaction and exchange (FX) fees:When a company makes an international payment, their bank or card provider may impose a foreign transaction surcharge as high as 3%, which typically includes fees for currency conversion. When dealing with large sums, this can result in a substantial hit. For example, if a business purchases a product from an overseas vendor for $10,000 with an FX fee of 3%, that means spending an additional $300 simply to make the payment.
- Slow, manual workflows:Global transactions often come with a stack of paperwork, from invoices that need to be approved, to purchasing receipts that need to be logged, tracked, and reconciled. Any company handling these tasks manually—and, worse, taking the time to write, cut, and send paper checks—is wasting hours that could be saved through AP automation, not to mention missing out on the tangible benefits that come from using a virtual corporate card.
Rho offers access to commercial-grade banking as a part of our platform and we believe in fully digital, fee-free services for business leaders, as well as for the global good. In contrast, many legacy banks rely on hefty global payment fees to cover the overhead costs associated with brick-and-mortar branches.
Prioritizing easy, no-fee global payments
In today’s economy, business leaders need flexible financial solutions they can count on from forward-thinking digital platforms. At Rho, we know that supporting (not just profiting from) global spend is an important part of that equation.
That’s why we never charge service and transaction fees for outgoing global payments, including foreign transaction fees on card payments. Plus, we keep our FX rate to a flat, market-leading 1% across 32 currencies. Our terms and prices are always shared openly and honestly, with no surprises or hidden costs.
We also offer integrated AP solutions that simplify expense management, automate invoice and payment processes, and sync seamlessly with a company’s accounting tools for instant reporting and reconciliation.
With Rho, businesses can stop paying avoidable fees, wasting time, and settling for mediocre service as they build international relationships, grow their remote teams, and establish a global presence. Our streamlined solutions are made for modern corporate finance, and that means making payments quick, painless, and fee-free—wherever they’re going.
Save everywhere with Rho.
To learn how Rho can optimize your global spending, talk to one of our specialists today, and take a tour of our fully integrated business finance platform.
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