In Crema, the way freelancers work internationally is what really drives us to bring the right solution for them to have their payments on time. We know it can be a struggle to be working in one place but receiving your money from somewhere else. This is why our platform is directed especially towards those who value a good international payment method that can be understood not only by them, but by their clients too.
In this article we will talk about which methods of international payments exist, whether they work globally, or not, and which one is the best option. If you want to learn more about where you can use international payments, read our last article on International Payroll: A Guide to Managing Employee Compensation Across Borders
Which international payment methods exist?
There are several methods of international payments available, each with their own advantages and disadvantages depending on the specific circumstances. Here are some of the most common methods of international payments:
- Bank transfers: Bank transfers are a common method of international payment that allow you to transfer money directly from your bank account to the recipient's bank account. This method is generally safe and secure, but can be slow and may involve high fees.
- Online payment services: Online payment services such as PayPal, TransferWise, and Crema allow you to send and receive payments internationally quickly and securely. These services often offer competitive exchange rates and lower fees than traditional banks, but may have limits on transaction amounts. In our case, Crema charges only a 2% comission, while PayPal charges 12%.
- Credit/debit card payments: Credit and debit cards can be used to make international payments, but often come with high fees and unfavorable exchange rates. Additionally, not all merchants accept international card payments.
- Money transfer services: Money transfer services such as Western Union and MoneyGram allow you to send money internationally in cash or by using a debit or credit card. These services can be convenient for sending small amounts of money quickly, but often involve high fees and unfavorable exchange rates.
How do online international payments work?
International payments online work by transferring money electronically from one country to another through various payment systems and intermediaries. There are some steps you normally follow when you’re involved in the process, for example, you would start by initiating the payment by logging into your online banking account or using a third-party payment platform to initiate the transfer. After you’ve sent the payment your bank confirms that you have enough funds to complete the transaction and sends the request to the intermediary bank or payment system. The intermediary bank or payment system verifies the transaction details, including the recipient's account information, and ensures that the transaction complies with local and international regulations.
Afterwards, the payment system then transfers the funds to the recipient's bank or payment system. This may involve several intermediaries and can take anywhere from a few hours to several days. Once the recipient's bank receives the funds and credits their account, they can then access the funds through their bank account or withdraw them from an ATM. If you and the recipient use different currencies, the payment system or bank will convert the funds into the recipient's currency at the current exchange rate. Now, you have to remember that fees and charges may be deducted from the transfer amount at each stage of the process. These can include currency conversion fees, transfer fees, and intermediary bank fees.
International payment solutions involve a complex network of intermediaries and systems, but advancements in technology have made the process faster, cheaper, and more convenient for businesses and individuals around the world.
The International Payment Solution for Freelancers
The way we see it is to search for what best suits you. Overall, the best method of international payment will depend on factors such as the amount of money being transferred, the speed of the transfer, the fees involved, and the level of security required. If in your case, you want to save your money in a secure online platform where you can decide where your money goes to and when, Crema is the right answer for you. Besides, like mentioned before, our fees are under the normal fee in other online payment platforms, which makes it the cheapest, yet safest, solution for freelancers. Not only that, but the fact that we’re the only payments platform with the option of selecting a suscription payment. The way this works is so that you can agree with your client, or recipient, to charge them automatically every selected date from their account to yours; This way you won’t have to be asking for your money, it will automatically get to you.
Think of the options of international payment methods that exist and choose what best works for you.