SEPA, SWIFT and Faster Payments (FPS) – what’s best for your business?

 

 

Advances in technology and banking systems means there are more ways than ever to make overseas payments. But with so many payment types out there, which are best for your business? Here we look at some of the main transfer methods. 

SEPA 

 

SEPA stands for the Single European Payments Area and is an initiative designed to simplify payments transactions in Euro between 36 countries in the Eurozone. As a result of SEPA, account holders can make cross-border payments between these countries in exactly the same way they would within their own country. It’s also possible to set up direct debits that are payable in another country. One bank account covers the entire SEPA system. 

To use SEPA, all you need is an IBAN (International Bank Account Number) and a BIC (Bank Identifier Code) in order to identify your account when it comes to making payments or receiving money. Typically, payments are processed within a day.  

However, charges by traditional banks can put customers off when it comes to paying this way, as these institutions can charge both the sender and the recipient. This is why it’s best to use newer, online payment solutions, such as KoalaPays, in order to reduce or avoid these fees altogether. 

Nevertheless, with its standardised payments structure, SEPA does have a number of advantages for business, such as increased transparency and faster settlement times when making cross-border payments.  

SWIFT 

 

The SWIFT (Society for Worldwide InterBank Financial Telecommunications) payment system also standardises the act of performing financial transactions between banks in two distinct countries. SWIFT does not actually send money; instead, it sends messages between the two banks who already have a direct relationship – or via an intermediary. This is a more convoluted process which can take longer and, while, SWIFT means you can send payments outside the Eurozone, charges with high street banks can be high.  

If the two banks involved in a SWIFT transaction don’t have an existing relationship (as in a commercial account with the other party), things get more complicated, as they then must use an intermediary. Obviously, this takes longer and involves more fees. FX fees can increase the total charge further. 

The good news is, carrying out SEPA and SWIFT transfers through a payment service provider, such as KoalaPays, can be much quicker and cheaper, as our technology automates many of these processes.  

Faster Payments 

 

Faster Payments Service (FPS) launched more recently, when New Payment System Operator (NPSO) took over responsibility of the BACS system. It’s a UK initiative to accelerate the process of making multiple small transactions – so it’s ideal for businesses that sell in the UK.  

While limits are set by individual banks, it is possible to transfer up to £250,000 using the system. Payments typically take few minutes to two hours to process. However, there is no guarantee on timescale and some may not be processed until the next business day.  

There are four ways businesses can use Faster Payments: 

 

  • Single Immediate Payment – A single payment that can be sent instantly, by mobile, online or in-branch banking.  
  • Forward-Dated Payment – A one-off payment at an arranged time, for example, when a bill becomes due. 
  • Standing Orders – Payments made on a specified date each month. 
  • Direct Corporate Access Payments – Designed especially for business customers where payment messages can be sent in bulk.   

 

It’s worth pointing out that not every banking institution offer FPS. At present, 21 banks and building societies have signed up to the service. 

Choose a platform that gives you more choice 

 

The preferred system of payment for most firms will largely depend on their business model and where they tradeScale of transactions will also have an impact on the choice of system used. 

It’s worth remembering, however, the more options you can give your customers, when it comes to paying, the happier they’ll be and the more business you’ll get. Ultimately, most firms will opt for a flexible payment solutions provider, such as KoalaPays. That way, they get access to all the services they need under one roof through a single dedicated account.   

A guide to making international money transfers

 

 

 

Making overseas payments used to be complicated and costly. Even now, banks, building societies, post offices and the use of international money orders can be expensive and inefficient when it comes to making international money transfers.

New technology has changed all that. There are now many online international money transfer service providers, but most tend to be designed for individuals sending money, rather than companies looking to do business internationally.

Finding the best one for your business needs can be a minefield. Here’s what to consider when it comes to finding the right international money transfer service for your business.

 

Keeping costs down

Every business has to keep their costs low to succeed. And if you need to make a lot of overseas payments, fees can add up very quickly. Most service providers charge a transfer fee, either in the form of a fixed fee or a percentage of the amount being transferred. Depending on the number and value of the payments you make or receive, you’ll want a provider that can offer the best value for your business.

With some providers, charges may not end with the transfer fee either. Most international transfers require a Foreign Exchange (FX) transaction. Other international payment providers make their money through a large spread between the buy and sell rates. The difference can be significant between one service provider and another. On top of all this, your own bank, or the receiving bank, may charge a fee for funding/receiving the transfer.

All these fees can put customers off completely when it comes to buying from you, so it’s hugely important to make sure you use a service that keeps costs low for you, as well as your customers.

 

Functionality that meets your needs

Depending on your reasons for making or receiving international money transfers, it could be useful to have certain features or functionality built in. For instance, if you’re a business that’s taking a lot of payments from overseas, keeping the process as simple as possible for your customers could make a difference to the amount of business you do.

Speed of transfer and delivery methods can all influence whether a customer chooses you or one of your competitors. This is why, at KoalaPays, we’ve tailored our service to give you the widest choice of instant payment methods, including digital wallets, SWIFT transfers and SEPA transfers – in more than 20 currencies worldwide. We also offer dedicated bank accounts to make funding and receiving payments as efficient as possible.

Having information at your fingertips can be crucial when it comes to making vital business decisions. That’s why a KoalaPays account comes with a comprehensive range of reporting tools, designed to make it easier for businesses to gain valuable insights and manage their finances more efficiently.

 

Staying safe and secure

Security can be a concern for many when it comes to overseas money transfer, especially businesses. Fortunately, with KoalaPays, we’ve taken care of all that. Our systems have been designed to be fully PCI-Compliant, using all the latest fraud prevention technology to ensure every transaction is protected and secure.

We also understand that many businesses have multiple users using the account, so our accounts can be configured with shared users features and customised access options to meet the needs of your business.

It’s also important to ensure that any payment provider you use is authorised by the Financial Conduct Authority. KoalaPays is an FCA compliant EMD Agent which is an important step in becoming a credible merchant solutions provider.

 

Making overseas payments easy and convenient

Bureaucracy and paperwork used to be a real problem when it came to making international payment transfers. Here, at KoalaPays we’ve made it as simply as possible to open an account and once you’re up and running, making and receiving instant payments involves little time and administration on your behalf.

Everything can be managed online making it convenient and hassle-free to make regular payments, or to receive money instantaneously into your bank account, so you can keep cash moving through your business.

To find out more about opening a KoalaPays account that makes it easier for you to do business, click here

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