May 21, 2015
Are you among the 90% of U.S. businesses that hire independent professionals? If so, chances are you’ll be seeking out talent online via one of the fast-growing crowdsourcing marketplaces — and chances are even better that the talent you hire will not be based in the U.S. This article was written and submitted by Nagarajan Rao, Head of Product at Transpay.
11 of the 15 countries on crowdsourcing platform Elance’s list of top freelancer locations are developing nations. It’s not uncommon for U.S. businesses of all sizes to work with a web developer in India, an engineer in Pakistan, or a designer in the Philippines.
Tapping into global talent provides a host of opportunities, allowing you to access markets and talent that are not available or affordable domestically. At the same time, it brings on unique challenges, such as needing to manage remotely, accessing your global team amidst wide-ranging time zones, and ensuring you’re prepared to pay globally.
Identifying a safe, quick, and cost-effective global payment method can be a tricky process. If you don’t lock down a good payments solution, you might face a myriad of problems that can impact your bottom-line. You could have work delays when your fee installment is slow in getting to your overseas consultant. You could see your overhead increase due to buried fees inherent to certain payments products. You might even notice a dip in your working capital when it’s tied up for days in the traditional bank wire system.
How can you make the smart choice when paying globally? Start by asking these five questions:
- What will it cost me and my recipient?
Asking specific questions will help you get the service that you need with no surprises or hidden fees. When it comes to global money transfers, hidden costs can be quite excessive, typically including both processing and foreign exchange fees. Find out how much you’ll be charged for both of these fee-types per transaction. Ask your payment processor how foreign exchange rates are calculated and if the recipients must pay additional fees. eWallets such as Paypal, for example, typically charge both the sender and receiver. The talented people you hire won’t appreciate having to pay to get paid, and might take another job over yours the next time you need them. When you compare products, consider using the latest mass payment platforms. These platforms can reduce costs by up to 60%.
- How long will it take?
Making quick payments is important, especially if a supplier won’t start work without an upfront payment. Ask providers how long it will take for recipients to receive your payments. Move on to the next company on your list if you’re told it will take longer than 24 hours. Payments often can be processed in minutes, although in some countries transactions may take a few hours or even a day.
- How do my partners prefer to be paid?
Find out how your suppliers and consultants prefer to be paid. Although direct deposit might seem like a good idea to our highly banked population in the U.S., suppliers in emerging markets may prefer to receive payments in cash. Look for a product that offers versatile payout options so you can accommodate multiple payment types.
In addition to identifying payment methods that are convenient for your overseas team, don’t forget to evaluate how the solution affects your home-based team. Some payments products are too complicated or time consuming, putting an unnecessary burden on your staff. Processing your global payments should be quick and effortless.
- Am I covered in terms of compliance?
Participation in the global payments marketplace requires compliance with a plethora of regulations and laws. It’s time-consuming enough to keep up with the regulations in your own industry; you shouldn’t have to wonder if the money you transfer via your international payment provider is compliant with applicable laws and regulations which vary country-by-country. Make sure the company you choose is licensed in the U.S. and appropriate international jurisdictions, and has a robust compliance program.
- What are my long-term needs?
Think about your long-term payments needs when evaluating international options. Let’s say you’re starting an ecommerce business to sell world-inspired clothing and accessories. Initially, you may only want to hire website designers and ecommerce experts in India. In the longer-term, you’re planning to buy jewelry from suppliers in Bangladesh and woven products from designers in Pakistan. To ease the process, find a payments solution that’s able to send money to multiple countries across Asia, Africa and/or Latin America to meet both your immediate and future requirements.
About the author: Nagarajan Rao is a global specialist in the high-volume, low-value payments industry. As the SVP, Head of Product and Strategy at Transpay, Rao spearheaded the development of a robust, end-to-end cross-border payments platform for delivering funds rapidly through a secure and compliant global proprietary network. Focused on emerging markets, Rao and his team work regularly with all types of businesses in providing white-labeled and branded mass payments options.
Did you like this article?
Get more delivered to your inbox just like it!