Receiving Payments From International Clients Simplified
The #PropTechDen held last August saw a significant rise in attendees, both local and international. Since the Brexit vote, investors from Asia, particularly China and Hong Kong, have shown increased interest in residential as well as commercial property. In the first quarter of 2017, buyers from Hong Kong spent around U.S. $3 billion on properties in the UK.
It is fairly common for international buyers who wish to purchase property in the UK to employ the services of real estate agents. However, agents often lose out on part of their earnings because of currency conversion when receiving cross-border payments. Besides, the process can also be complicated and time consuming. So, how to you receive payments from international clients in a simple yet cost effective manner?
Banks or Overseas Money Transfer Companies
Your client might be inclined to use the services of his or her local bank to make international payments directly into your bank account. However, banks are typically less cost effective when compared to specialist overseas money transfer companies. This is not only because of the steep fees they usually charge, but also because of the unfavourable exchange rates they provide.
Consider this example where a client needed to send a payment of U.S. $3,000 to a real estate agent in the UK. He compared the services of a prominent American bank and a leading money transfer company.
Money Transfer Company
|Exchange Rate||$1 = £0.7412||$1 = £0.7691|
By using the money transfer company instead of the bank, the agent ended up receiving around £100 more.
If you have a steady flow of international clients from one or more countries, you may consider opening a multicurrency account. A typical multicurrency account comes with local bank details of different countries, giving you the ability to receive payments and hold funds in multiple currencies.
In this scenario, you do not have to worry about currency conversion taking place because the payment gets to an account denominated in the same currency. Currency conversion only takes place when you withdraw the money into your local bank account, and this gives you the ability to tide over temporary negative exchange rate fluctuations.
Some of the leading companies that provide multicurrency accounts include:
- WorldFirst. If you sign up for the World Account, you get free receiving account details for U.S. dollars, Canadian dollars, British pounds, euros, Australian dollars, Chinese yuan, and Japanese yen.
- OFX. With the Global Currency Account, you get free receiving account details for U.S. dollars, Canadian dollars, British pounds, euros, Australian dollars, and Hong Kong dollars.
- TransferWise. The Borderless Account provided by TransferWise comes with free receiving account details for U.S. dollars, British pounds, euros, and Australian dollars.
Details You Need to Provide
Details you need to provide for receiving payments from overseas include:
- Your name or the name of your business
- A bank account number held in the same name
- Your bank’s name and SWIFT code
- An IBAN (if applicable)
If you plan to use a multicurrency account, the company you work with provides unique bank account details for all currencies, which you get to use as regular bank account details.
Receiving Payments Without Providing Bank Account Details
If you wish to receive payments without parting with your bank account details, you may ask your client to send you an international bank draft. While a bank draft is secure, it can take weeks before you actually get the money in your account.
Another option is to use the services of a company that lets you receive payments by giving your clients no more than your email address. While PayPal has offered this service for some time, TransferWise also offers this feature now. If you are in a hurry to receive a payment, you may even consider getting your client to send the money to a cash pickup location using a company such as WorldRemit, Western Union, or MoneyGram.
No matter which country you stand to receive payments from, getting your clients to work with suitable service providers may lead to savings for both parties. Fortunately, a number of specialist companies operate out of different regions, and finding one to suit your needs after running a comparison is rather easy.