As your product continues to expand, whether in global user base or the amount of countries serviced, your business has likely run into the issue of processing international payments. And even for a team well-suited in problem solving, streamlining the international payment process for your product is not an easy task to wrap your head around. Fortunately, integrating with a third-party API can give your team the automation they so desperately need, along with the security and scalability required to grow your product.
Remove Murkiness From International Payments
With international payments, there are certain per transaction fees your team needs to be aware of when attempting to build a scalable product. If you need to send or receive money transfers same day or next day, each multi-currency transaction will likely be sent through an international wire. And if you plan to route those payments through your bank, that can end up costing on average $40 per payment on your end, and anywhere from $10 to $20 as an incoming wire fee once it reaches it’s destination.
As consumer preferences have changed along with the gig economy, folks are sending smaller amounts of currency, farther around the world. Whereas a $60 charge might have been a fairly insignificant amount for large international transfers in the past, if you’re facing that fee on every $100 payment from your users, that’s certainly not a sustainable option.
To further complicate the matter, as international wires use corresponding banking channels, each bank might be entitled to a cut of the transaction amount along the way. Say you’re banking in the US and need to send a payment to China. That US bank would use their corresponding network of banks to transfer the payment along its chain, until the payment eventually reaches the destination — with each bank taking a cut along the way. As a result, you can never guarantee the recipient will receive the whole amount and that’s not a scalable customer experience.
Download Does Your Payments Solution Help You Meet Your Operational Goals? to learn how to modernize your international payments for operational efficiency
Life Gets Better With Integration and Automation
To allow for international payments to flow more smoothly, an optimized workflow for your product should include straight-through processing with minimal touch points. As your product scales, more and more payments will require handling by your team. If your operations team has to manually re-enter the same transaction details for payments to be transferred from one party to another, the amount of errors will rise in tandem with your growth rate. By automating that process through a third-party API, your team is relieved of a huge headache and you can start to see a scalable way forward.
An integration with a third-party payment processor also gives you access to a new world of payments. Before, you’d be paying high fees for wires. By integrating with a payment provider you’ll have access to the provider’s network for low cost wires and low value in-country payments. Sixty dollar payment fees start to become a thing of the past, replaced with $5 to $10 going forward. And with low value, local rails you can rest assured that the full settlement amount will always reach the end recipient at a cost of less than $2.
Choosing the Right API
When choosing the right third-party payment API, there are many factors you’ll need to take into consideration. The right partner can streamline your payment process and set your product up for continued growth. Here’s what you should look for:
- API Architecture — As you are evaluating different API vendors, go through their documentation to see how robust the architecture is. Can a layperson make sense of the way it’s organized? Is it more like a machine language or does it read human? That will speak volumes about the support you’ll receive going forward. And as always, a RESTful architecture mandates developer-friendly API design by ensuring fast performance and reliability for your integration.
- Security — International payments is a highly regulated industry. Therefore, security is of the utmost importance due to the constant possibility of one of your payments being hacked. Your provider needs to have the right libraries for encryption, proper data privacy controls in place and, at minimum, two-factor authentication.
- Scalability — As your company grows you might have hundreds of thousands of payments at one point. Make sure the provider you select can scale with you. This isn’t something you tend to think about when first starting out, but scalability in terms of global expansion as well as volume of payments is essential for future success. Above all else, your API provider needs to be global.
With Currencycloud’s API, you can automate the international payment process and optimize your workflows to meet the unique needs of your product and team. To learn more, schedule a call with one of our payment experts today!