Many people may think that getting money from abroad by bank deposit is the easiest, cheapest, and safest way to do it. Even though bank transfers are often the most common way to receive money from overseas (especially when done locally through a money transfer specialist), they may not always be the best for your needs and preferences.
This will form the basis of this article, and we'll walk you through different options you can explore to receive your money internationally. Each offering has its unique advantages. Read on!
How To Receive Money From Abroad
Online payment gateways
If you want to accept payments online, you can use one of several methods. One of which is the online payment gateway. PayPal is by far the most popular. It, however, faces stiff opposition from other similar service providers.
Numerous other online payment channels are just as open, simple, and quick to use. Also, the fees for using these gateways can be lower than those for using PayPal or a traditional bank for smaller transactions. This is because there aren't any exchange rates or conversion costs, and most expenses are based on a percentage.
It's not just about the price; you should also look into the services they offer. Most payment gateways offer different payment methods and can be connected to other services and apps.
This might be anything from bitcoin to a credit card. The services also include subscriptions, POS integration, and automatic billing. So, when comparing different options for online payment gateways, it's essential to compare their features.
Here are the most common online payment processors and their associated fees:
Wise
The wise account is a practical choice. Wise (previously known as TransferWise), a widely used money transfer service, is renowned for its low fees and transparency. And there's this great feature called a "Multi-Currency Account" that they provide.
If you have a Wise Multi-Currency Account, you can hold 50+ currencies and receive free international money transfers in USD, GBP, EUR, NZD, PLN, and AUD.Keeping tabs on the exchange rate and making the necessary adjustments to return to your own currency is all that is required. When converting currencies, the mid-market rate is the one to use.
It can also be linked to the Wise debit card, which is accepted worldwide. To top it all off, opening a bank account in several countries is as easy as a few mouse clicks, and you may have money sent into your account in the local currency. For both you and the sender, this method yields cost savings.
There are no fees associated with opening a Multi-account, and you'll only pay when making a foreign exchange. Despite this, Wise continues to provide exceptionally low prices. To receive funds, simply provide the sender with your Wise Account information.
PayPal
PayPal supports more than 200 countries and 25 currencies; you may even use the service to recharge a foreign recipient's mobile phone. However, this service does not come without a cost, as there are expenses connected with wire transfers.
Withdrawals from a bank account or your PayPal balance cost 5%, with a minimum of 99 cents and a maximum of $4.99. You will be charged a 2.9% financing fee and a fixed fee that varies by destination country if you utilize a debit or credit card to conduct a money transfer.
Payoneer
The use of Payoneer facilitates effortless international money transfers. Payoneer allows users to receive and send money globally, even if they are unfamiliar with the local banking system or currency. Additionally, it comes with a data analytics dashboard that gives users insight into payment trends and numbers.
It is ideal for business owners, as funds can also be deposited into local bank accounts. One of the several ways you can use Payoneer is to pay independent contractors, freelancers, etc.
Payoneer can help you get paid faster and save money, regardless of where you are. Anyone, whether an established business or a startup, can use Payoneer. For instance, receiving payments is a breeze with Payoneer if you are a freelancer.
Withdrawal from a bank account
Money sent from another country can be deposited directly into your bank account via wire transfer. You need only supply the sender with your bank data, including your complete name, bank account number, sort code, and IBAN and SWIFT codes.
You can find these on your online banking app, and the sender will make the transfer by visiting their bank's branch or via online banking. Most banks have high spreads on currency exchanges and transfer fees, making international wire transfers too expensive for most people.
Money order
Money orders, which are pre-paid, printed certificates sent through the mail and exchanged for cash at a physical location, are another common and safe way to get money from overseas.
While becoming less common, money orders are still widely used in the United States, where they have been a reliable and trusted means of transferring funds to US for decades.
For example, in the past ten years, there has been quite a drop in the number of money orders sent to Mexico. You can purchase money order certificates at any USPS, MoneyGram, or Western Union outlet authorized to sell them.
Frequently Asked Questions
Can I receive a foreign transfer in a different currency?
To get an international transfer in a foreign currency, you need a foreign currency account or one that can handle more than one currency. Many companies, like Wise and Revolut, offer flexible multi-currency accounts that you can open online for free.
Must I report an overseas money transfer?
Depending on the purpose of the payment and its value, you may be required to report it to the IRS. Get professional guidance if you're unsure about your obligations.
What is the cost of receiving a wire transfer from abroad?
Typically, the majority of foreign transfer fees are handled by the sender. However, if you receive a bank wire, intermediary banks may charge fees when the payment is processed. Depending on the payment type, these fees might range from $20 to $40. Lastly, your own bank may charge you a receiving fee, often between $10 and $20.
Do I need a bank account to receive international wire transfers?
You are not required to have a bank account to be paid from abroad; however, having your money deposited into a bank account is often the cheapest option. If you can't get into your bank account, you should have the money sent to a mobile wallet or picked up in cash.
Talk To A Tax Expert!
In this article, we reviewed some of the means you can explore for receiving money from abroad. Suppose you offer goods and services to a global audience. In that case, it is crucial to understand the legal and tax implications of receiving money from abroad.
This is why it may be necessary to speak to a tax expert or your local post office who can advise you on what is taxable and what is not. So, in planning to go global with your services and goods, don't forget to include tax advisory as one of your expenses.
