Cross Border Business Payment Strategies: Save Costs & Keep Cash Flow Secure!
Collaborating with partners, vendors, or suppliers from different parts of the world is no longer just an option it is the key to business growth. However, for many entrepreneurs in Indonesia, the cross-border business payment process often presents its own set of challenges. Obstacles such as high bank administrative fees, non-transparent exchange rates, and complex bureaucratic procedures frequently drain both energy and company profitability.
If you want to optimize international fund transfers to be faster and more economical, understanding modern payment strategies is a crucial first step.
What is Cross-Border Business Payment?
Simply put, cross-border business payment is a financial transaction occurring between two parties (organizations or individuals) residing in different countries.
For SMEs, this is critical. For example, when you import raw materials from China, pay for freelance services in India, or subscribe to operational software from the United States, you need a payment method that is easy, simple, and ensures the amount sent is exactly what is required without unnecessary or high deductions.
Conventional International Money Transfer Methods
To this day, many business players are still stuck with conventional methods that tend to be expensive:
- SWIFT (Wire Transfer): The traditional banking route connecting banks worldwide. While secure for large transactions, SWIFT tends to be slow (taking 1–3 business days) and carries unpredictable intermediary bank charges (hidden fees).
- Letter of Credit (L/C): A guarantee from a bank to ensure the security of international trade transactions. L/C is highly secure for massive transactions, but the bureaucracy is heavy, the process is long, and it imposes high commission fees.
Modern Cross-Border Business Payment Alternatives
With advancements in financial technology, more efficient alternatives have emerged for business owners: Digital Remittance. Utilizing dedicated fintech platforms for fund transfers allows transactions to occur almost instantly.
Advantages of Digital Remittance:
- Competitive Exchange Rates: You get rates close to the mid-market rate, far better than conventional bank sell rates.
- Low Costs: By cutting out intermediary bank fees, operational costs for sending funds become significantly cheaper.
- Speed: Funds can reach the vendor’s account within minutes to a maximum of one business day.
Innovation: The Pay by Card Feature from Transfez
Transfez introduces a solution that truly changes how companies manage their obligations through the Pay by Card feature. This innovation allows business owners to pay international invoices using a credit card, even if the vendor only accepts bank transfers.
Strategic Benefits for Your Business:
- Cash Flow Management: You can settle vendor bills today using your credit card limit, while you only actually pay the bank when the credit card statement is due (usually offering a tenor of up to 45 days). This is a highly effective SME cash flow solution.
- Rewards & Miles: Large business transactions shouldn’t go to waste. Use a credit card so that these expenses turn into reward points or free flight tickets (air miles).
- Comprehensive Card Support: Supports cards with VISA, Mastercard, JCB, and American Express (Amex) logos.
- Fee Transparency: Service fees are clearly stated upfront: 2% for international transfers and 1.75% for local transfers.
Expand Your Business Reach: Global Corridors
The Pay by Card (PBC) service from Transfez opens new corridors for cross-border invoice payments. By leveraging the credit card payment cycle, you can effectively extend your payment terms (net-D). This allows the company to maintain liquidity and rotate working capital more optimally before the credit card bill is actually paid.
Destination Countries for Pay by Card (PBC):
- Asia: China (via AliPay), Philippines, Hong Kong, India, Japan, South Korea, Malaysia, Pakistan, Singapore, Thailand.
- Europe: Netherlands, Belgium, United Kingdom, Italy, Germany, Lithuania, France.
- Americas & Oceania: Australia, Canada.
Tutorial: Paying International Invoices via Pay by Card
Making a payment through Transfez is designed to be simple for everyone:
- Select Pay by Card Menu: Open the Transfez app and select the Pay by Card menu.
- Upload Invoice: Upload a photo or PDF of the official invoice from your vendor for security validation.
- Fill Recipient Details: Enter the vendor’s overseas bank account number. Transfez supports transfers to over 70 countries.
- Choose Funding Source: Enter your credit card details as the payment source.
- Confirm & Send: Review the fee details and exchange rate, then confirm. The funds will be processed and sent as a cash bank transfer to the vendor’s account.
Efficiency in cross-border business payment is a direct investment in your company’s profitability and financial health. By switching from legacy banking routes to digital remittance solutions like Transfez, you not only save on administrative costs but also gain better cash flow flexibility.
Download Transfez App
Transfez App can help you transfer money abroad more quickly and efficiently. Jack Finance can also help your business in making transactions abroad. For those of you who want to send money to relatives who are abroad because they are studying, working, or traveling, Transfez will be ready to help. This app is available on Android as well as iOS.
