The increasing need for International Payments

UK organisations are increasingly looking to trade outside national boundaries and, as such, have an increasing need to manage payroll in currencies other than GBP.

Unfortunately, in stark contrast to the efficiency and effectiveness of UK domestic payments, the majority of international payments are expensive, time-consuming and fraught with the potential for errors.

According to research undertaken by TowerGroup, 36% of all international payers experience at least one problem at an estimated cost to UK businesses of £100m a year, with the average missing payment taking seven working days or more to rectify. This can lead to ‘double dipping’ where not only do you pay for the original payment but you then get charged for the ‘failed’ payment as well.

In the UK, the banks hold a majority market share in the processing of international payments – 97% – despite the fact that there are several high quality solution providers out there who can offer a customer-friendly alternative.

Key functions for any business trading in foreign currency are:

  • Transparent transaction charges
  • Real time exchange rates with low margins
  • Ease of execution
  • Accessibility to the service / solution from anywhere
  • Automation and bulk file upload
  • Reliability (after all, this is payroll we’re talking about!)

… And in an ideal world, the international payments processing would be managed from the same platform as the domestic payments.

With the year on year growth of international trade, UK companies need to ensure their payments process is effective and efficient whether dealing domestically or across the globe. Health-check your current setup and make sure there isn’t something better out there.

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Background information:

Payment Services Directive:

  • Calls for an environment ‘in which citizens and businesses can make cross-border payments as easily, safely and efficiently as they can within their own countries and subject to identical charges’.
  • Promotes transparency for both payer and payee within international payments systems.
  • Stipulates that if a payment goes missing, the onus should be on the service provider, not the customer, to proactively look to solve the problem – without charging any additional fees.

Did you know?

  • VocaLink are no longer supporting the SEPA initiative. SEPA (Single Euro Payments Area) is alive and kicking, but only in the intra-bank space, there is no direct access for corporates.