International

Business
Payment 101
The Only Comprehensive
Guide You Will Need

1
Introduction Index

If your business is borderless, your pay-

ment options should be too. Whether you
3 International Transactions
Underpin Modern Commerce.
are a startup or medium sized business
Various business instances which
which wants the quickest, easiest and most
necessitate flow of money across
cost-effective way to make international borders.
payments, or you’re the CFO of a larger busi-
ness that requires highly tailored strategic
hedging with fast cost-effective execution,
first you will need to understand the business
5 Many Considerations
When Making an
payments landscape in order to leverage and International Payment.
make use of B2B payments to help your busi- Various factors that go into deciding
ness succeed. which payment route is right for you.

What are the options ? What are the pros and

cons? Finally, how much will it all cost? In this
guide, we cast the light on the B2B payment
8 Plethora of Payment Options.
Understand the most popular payment
landscape and lay out everything you need to methods and pros and cons of each.
know for setting up a successful B2B payment
processing system.
10 Fintech Based Solution Like
Wallex Has an Edge Over
We’ve compiled this detailed guide to walk
you through everything about the B2B Traditional Banks.
payment process and the solutions today. How fintech is bridging the gap
between what a traditional bank
offers and what modern businesses
have grown to expect.

14 Estimating Your Potential

Savings.

15 Investree Saves 70% in

Fees on Their Cross-Border
Payments with Wallex.

17 Wallex Simplifies Overseas

Payments.

2
International Transactions
Underpin Modern Commerce.
In this section read about the various business instances
which necessitate flow of money across borders.

In a globalised business world, supply chains PAYROLL PAYMENT

are scattered across the world. Most
One of the biggest impacts of the recent
businesses have come to rely on overseas
pandemic is remote working. New research
vendors, freelancers, and suppliers in addi-
shows that remote workers can be signifi-
tion to domestic independent contractors
cantly more productive than employees work-
and traditional employees. It can be confus-
ing in offices. Other studies support this;
ing, time-consuming, and labor-intensive to
Global Workplace Analytics found that tele-
pay international vendors, freelancers, and
workers were 20-25% more productive than
suppliers.
office-based employees. If you hire freelanc-
ers, they typically prefer to bill for their time in
a global prime currency like USD or Euros.
GLOBAL SOURCING
Global sourcing or sourcing overseas refers to If you have a remote office in a different
buying materials, products or services from country and are seeking to pay staff there
manufacturers or suppliers that are located from your headquarters, you will need to make
outside of your home country. Cost-savings payroll in the currency that is local to your
are one of the main advantages of global employees. This will typically involve an inter-
sourcing. Nowadays, it’s easy to find, secure, national payment for your business. Refer to
and do business with international suppliers; this detailed guide on dealing with payroll for
the only thing slowing you down is how you go your remote employees in multiple countries.
about paying your international suppliers.

One thing that will never change is that

businesses of all sizes want a quick, reliable,
cost-effective and secure method to make
overseas payments. One delayed payment,
or a couple of unexpected fees, and your
relationship with a supplier can get derailed.

3
International Transactions Underpin Modern Commerce

INTERCOMPANY LOANS SELLING ON ONLINE

AND REPAYMENTS MARKETPLACES
Intercompany loans are loans made from Online marketplaces have two types of stake-
one business unit of a company to another, holders, the end customers as well as the
usually to shift cash to a business unit that sellers. Marketplaces consolidate payments
would otherwise experience a cash shortfall from end customers in various currencies and
or to shift cash into a business unit (usually re route the payment to the original sellers.
corporate) where the funds are aggregated
for investment purposes. In 2020, online marketplace customers,
especially those on the payout receiving end,
The business units may be in different foreign i.e. the sellers, freelancers, tutors, course
locations, thus subjecting the loan transfers content creators, still have significant diffi-
and subsequent repayments to exchange culties receiving their payouts on time and
rate fluctuations. without hassle. Cross border specialist com-
panies like Wallex now offer specialised solu-
tions to meet the needs of online sellers on
such marketplaces.

COLLECTING PAYMENTS
FOR SERVICES RENDERED IN
FOREIGN MARKETS
Collecting accounts receivable is a vital and
often difficult task too. In fact, a research
found that 49% of businesses are frustrated
by the pain of collecting payments abroad.
Distance, time zones, and various legal and
cultural differences can derail your efforts to
collect international debts.

4
Many Considerations When
Making an International Payment
In this section learn the various factors that go into deciding which
payment route is right for you.

In choosing the right B2B payment solutions International bank transfer charge up to 1.5%
for your business, there are some important – sometimes even more. Naturally, the higher
factors you should consider. Knowing this will the transfer amount, the higher the transfer
help you navigate the complex B2B payment fees.
landscape, make an informed decision.
Moreover, every international wire transfer
passes through one or more intermediate
TRANSFER FEES & COSTS banks (typically 1-3) on the way to the recip-
ient’s bank. When the banks in the sender’s
Based on our survey to our customers,
and recipient’s countries do not have a direct
cost-effectiveness is the ultimate priori-
financial relationship, and therefore cannot
ty when choosing a provider for overseas
transfer money to each other directly, the in-
transactions. The first step to minimize your
termediary bank(s) helps complete the trans-
payment cost is to identify its various compo-
action. In return, intermediary banks collect
nents.
a flat fee or “cut” known as the intermediary/
beneficiary bank charge which is passed back
These are fees that are applied as a service
to either the sender or the beneficiary of the
fee by the service provider. A transaction fee
payment.
or a service fee may be a flat amount or a % of
the amount you wish to send.
So ensure that you check with your provider
on any charges that a recipient may incur, else
What it really cost to transfer USD 25,000 you will have a very disgruntled beneficiary on
from Indonesia the other side.

Local Bank T 365.0 mil

MARKUP ON EXCHANGE RATE
Local Bank B 363.4 mil
We all see the exchange rate on Google,
this is usually what is referred to as the
Wallex 362.6 mil mid-market rate or the interbank rate. It is a
commonly accepted fact that banks or remit-
Terms and conditions apply.
tance providers will add a markup or premium
to this base rate.

5
Many Considerations When Making an International Payment

In fact, based on our latest study, 75% of The length of time the professionals
business professionals still think they don’t think needed to send money from
get the best exchange rate possible when Singapore to Indonesia
making international payments.
60%

Do you think you get the best rate 40% 52%

possible every time you make an
interational transaction? 20% 28%
21%
0%
Yes <15 Minutes Same Day 2-3 Days

25.0%

DATA AND SECURITY

No With the high rate of internet fraud out there,
75.0% you can never be too careful with securing
your payment solutions.

% of surveyed professionals who believe they could avail of the

best prevailing FX rate on their international transactions. Ensure that the company you choose meets
all the necessary security requirements,
including being licensed and regulated by the
Knowing how to spot a hidden currency
local law & regulations. For instance, if they
markup rate also will help you to save cost
are offering services in Indonesia, make sure
and decide which method to use.
they are regulated by Bank Indonesia and
comply with the latest security infrastruc-
tures available.
SPEED
Traditional methods such as SWIFT transfers
can take around 3-5 business days to process CURRENCIES AND COUNTRIES
payments depending on the number of inter- SUPPORTED
mediaries involved in the process.
The coverage offered by a service must also
cater to the specific needs of a business.
However, using a network of fintech pay-
Businesses conduct their operations in
ment processors and banks, Wallex can cut
different regions of the world, meaning they
this process to as quick as in a few hours e.g.
have different coverage needs for making and
with Wallex a transfer between Singapore
receiving payments. Having a provider who
and Indonesia is almost real-time. Banks and
supports multiple currencies enables consol-
other providers take up to 2-3 business days
idation of all your business needs on a single
to achieve the same.
seamless platform.

6
Many Considerations When Making an International Payment

SERVICE AND SUPPORT A B2B specialized payment platform like

Wallex on the other hand offers a dedicated
In today’s world, customer support is more of
account manager to each customer irrespec-
a right than a luxury. Excellent customer ser-
tive of their transaction size. So if you are an
vice and support can never be estimated, and
owner of a business or have limited resourc-
it should mean;
es in your finance department, this is a great
option to have.
• Getting help through the onboarding
process.
• Getting customised rates for a high value
TRANSACTION LIMITS
transaction.
• Getting support via email, live chat, or call. Leading Banks in Indonesia offer online
• Troubleshooting your technical questions international payments now, but restrict the
as soon as they come up. amount that you can send online. Banks also
typically require extra documentation for
Unfortunately the SME segment is most high value transactions. So, if you have higher
neglected by Banks when it comes to custom- value payments to make e.g. supplier pay-
er experience, offering personalised services ments or have limited resources and time, do
only to large corporations who have deep re- check the transaction limits before choosing
lationships with them. a long term partner.

7
Plethora of Payment Options
In this section understand the most popular payment methods
and pros and cons of each.

Choosing the right international payment PAYPAL

method can make all the difference in stream-
Pros: User-friendly, well-known, free account
lining your international business relation-
setup.
ships. It’s crucial that you understand what’s
involved with each one. Cons: Hefty fees, sending limits.

PayPal is a popular option for many busi-

BUSINESS CREDIT CARDS nesses worldwide. With PayPal, the transfer
occurs between two accounts registered on
Pros: Good for managing short term cash
the platform i.e. both buyer and seller have
flow, earn reward points.
to have a PayPal account. You will need the
Cons: Varying fees, high exchange rate (typi- recipient’s registered email address to send
cally above 2%). money with PayPal.

By converting unused corporate credit card

However, PayPal might not be the best
limits into cash flows, you can pay employees
payment solution for businesses. Recipients
and freelancers without paying interest for
are charged 2.9% (as well as $0.30) when
a set number of days. Some cards also offer
receiving money for goods or services.
rewards on every transaction.

Bear in mind that cards are not issued to

small and growing businesses and if they are,
WIRE TRANSFERS THROUGH BANKS
they come with an annual fee and attract late Pros: Safe, reliable.
payment fees for delayed payments.
Cons: Slow, expensive, dated processes.

The most significant disadvantage is being

Banks still dominate the international
subject to a Foreign Currency Transaction Fee
business payments landscape. Granted, an
which is typically ~3.25% of the converted lo-
international wire transfer, especially through
cal currency amount. Another cost is Dynam-
the SWIFT network, is one of the most trusted
ic Currency Conversion (DCC), which usually
methods to make business payments espe-
results in unfavourable exchange rates, and
cially for high value payments.
increases your costs.

8
Plethora of Payment Options

However, it is also slow taking up to 3-5 busi- Wise is gaining popularity for its easy to use
ness days, depending on the sending and interface however the service is limited to
receiving countries and banks involved, and individuals in many Asian countries and not
transfer amounts. More “exotic” currencies suited to business purposes. This means
can take even longer. lower transaction limits which may not cut it
for high value business payments.
Even though most banks in Indonesia now
offer online services, they do so only for a While the company claims to offer transpar-
small number of payments with a limit of USD ent rates you have to look out for the transfer
25,000. For high value transactions, it is man- fees which are a % value of the amount you
datory to visit a bank branch and will need wish to send. While this works for low value
more extensive documentation. Failure to transactions it can quickly turn into an expen-
meet these requirements will lead to addi- sive affair for high value transactions. Always
tional delays and possible rejections. compare the final amount received by the
beneficiary to compute the true cost of your
International bank transfers are also expen- transfer and compare alternatives.
sive as they typically have a % charge on
the principal amount and another flat fee on
top of the exchange rate as a transfer fee. WALLEX
After calculating the mid-market rate, the
Pros: Fast transfers, low cost, transparent
bank adds a “spread” of 0.07%-7% above the
processes.
mid-market rate. Only large businesses with
established relationships get the benefit of
Wallex is a B2B specialist payments provid-
customised FX rates, the rest get the pub-
er focusing on the needs of businesses and
lished rates, which have a higher spread.
is able to send wire transfers to people or
companies not registered with the service
These numbers are constantly fluctuating,
- through both SWIFT and other local trans-
which affects how much the exchange will
fer channels. In a recent study, the majority
cost you in outgoing payment. Wire trans-
of Wallex customers testify to getting faster
fers can be expensive for receivers as well,
delivery of funds and better cost savings than
since they often have to pay additional fees
their previous payment provider.
to accept their money.

In addition to exchange rates that are

better than banks, Wallex’s interface also
WISE (PREVIOUSLY TRANSFERWISE)
offers many features specifically designed for
Pros: Fast set up, mobile app, competitive businesses like the ability to make multiple
rates. payments in different currencies at the same
Cons: Fees as a % of value, Better suited for time as well as offering multi-level approv-
individuals. er matrix, similar to bank mandate, for better
corporate governance.

9
Fintech Based Solution Like Wallex
Has an Edge Over Traditional Banks
In this section deep dive into how fintech is bridging the gap between
what a traditional bank offers and what modern businesses have
grown to expect.

A major differentiator between banks and

fintech players is the personalisation of cus-
tomer experience,which has become the key
element defining success for organizations
across verticals.

Younger and modern Fintech firms tend to do

a better job of listening to customers and go
that extra mile to understand and address
specific pain points in the existing journeys.
By disrupting and reimagining the business
processes, they create operational effi-
ciencies that are not matched by traditional
banks.

Traditional banks heavily rely on convention- Process efficiency is achieved through fea-
al practices, right from the way rates are set tures like mobile readiness, paperless verifi-
to operational processes, all of which lead cation, online onboarding, automated valida-
to higher turnaround time for businesses. In tion, approval systems etc.
addition, banks are burdened with outdated
stand-alone systems and heavy code bases Here are some of the top reasons why grow-
that may not be easy to modernize and auto- ing businesses prefer fintech players over
mate. traditional banks:

In comparison, fintech solutions are built from

the ground up to provide the required agility STRUCTURE & SYSTEM
by simplifying processes and application of Fintech is innovative, customer-centric, and
latest technologies. Onus on customers is streamlines complex cross-border business
kept to a minimum and most processes are payments processes, making it more
online and automated. accessible to small businesses with limited
resources.

10
Fintech Based Solution Like Wallex Has an Edge Over Traditional Banks

Every single process from opening up an COST EFFECTIVENESS

account, onboarding, making payouts, recon-
When you transfer funds internationally,
ciling accounts and reporting are simple and
banks will offer a different rate and charge
quick to use.
fees on the currency exchange which is
known as the spread or exchange rate mark-
On the other hand, the legacy systems
up. This rate can be as high as 1.5% at most
and regulatory framework that most tradi-
major banks. Moreover, every international
tional banks in Indonesia use restrict their
wire transfer also passes through one or more
ability to leverage new technologies in time.
intermediate banks (typically 1-3) on the way
For this reason, banks can’t introduce new
to the recipient’s bank. This typically ranges
services or products that address customer
from USD 10 - 20.
needs or issues at the same speed as fintech
companies.
Fintech, on the other hand, connects cus-
tomers directly to a network of payment
partners around the world. By skipping
USE OF TECHNOLOGY
middlemen, customers can get faster pro-
Traditional banking systems are often difficult cessing times and avoid unnecessary fees.
to operate, due to clunky, outdated systems Also, due to a more optimized business
and technology. Specifically in Indonesia, structure, fintech companies can offer
customers using banking solutions are often products and services that are up to 85% less
faced with a range of problems like lengthy expensive than traditional banks.
approval processes, heavy UI/ complicated
user flows, outdated code base for integra-
tion and poor customer tech support for
ACCESSIBILITY
queries.
In most cases, banks require you to be
physically present to open an account or to
Meanwhile, fintech leverages this exact gap.
apply for financial services. Not all banks in
Technology application in fintech solutions
Indonesia have the technology to verify cus-
can be seen at each stage of the customer
tomers’ identity online. This makes traditional
journey, where every customer interaction
banking less convenient for consumers, lead-
is optimized. Interfaces are seamless, intui-
ing to an unsatisfactory experience.
tive, easy to use, yet functionally rich. Fintech
leverages new technologies like automation,
Fintech is agile and accessible. They work
online onboarding & verification, and cloud
virtually, so consumers don’t need to physi-
computing to give customers a unique
cally be present to transact or partake in
experience. It’s focused on seamless delivery,
financial services. This makes fintech a con-
personalization, speed, and relevance.
venient option. Users can register on their
computer, or in most cases, via an app on
their mobile device.

11
Fintech Based Solution Like Wallex Has an Edge Over Traditional Banks

Fintech’s offer 24/7 access, remote account So, if you’re a business looking to make a
opening, quick consultations, and better choice between a bank and a fintech solution
communication with customers overall. They to handle your business’s financial heavy lift-
have grown due to their focus on user ing, here’s a quick comparison that will help
experience, which is where banks have fallen you make the decision.
behind.

Business Bank
Wallex in Indonesia
Account in Indonesia

Sign up process In branch verification. Online.

Minimum Balance Yes. No.

requirement

Monthly Yes. No.

administration fee

Foreign currencies 13-16 currencies. 47 currencies .

supported

Fees on international USD 25 + IDR 50.000. Flat fee of IDR 100,000 per
payments transaction. No tiering.
Some banks have % charge
up to 1.5%. Naturally, the
higher the transfer amount,
the higher the transfer fees.

12
Fintech Based Solution Like Wallex Has an Edge Over Traditional Banks

Business Bank
Wallex in Indonesia
Account in Indonesia

Intermediary USD 10- USD 20. 0.

bank fees

Time when 2-4 business days. Same-day onwards*

recipients get funds Details differ as per
currency paid out.

Currency hedging Depends. Yes. Rates locked in for

24 hours.

Max amount of tran- USD 25,000. Unlimited.

saction made online

Mandatory Typically yes, for transaction No.

branch visit over USD 25,000.

Dedicated account No, depends on relationship Yes.

manager with bank.

Operational hours to 9.00 AM - 3.00 PM. 24 hours**.

initiate payment

*T&C apply.
**Refer to the availability of Wallex platform to set up payments.

13
Estimating Your Potential Savings

Let’s say your company wants to pay a USD 25,000 invoice to your vendor in the United States of
America. Here’s a comparison of estimated fees calculation between Wallex, a traditional bank in
Indonesia, and another local remittance company in Indonesia.

*on 7 April 2021 Wallex in Indonesia Traditional bank Local Remittance

at 12.57 WIB in Indonesia Company

Rate USD 1 = IDR 14,500 USD 1 = IDR 14,521 USD 1 = IDR 14,596.89

Service fee IDR 100,000 IDR 50,000 + USD 25 IDR 89,000

Don’t get fooled by the lower FX fees offered. In fact fees should always be viewed in conjunction
with the exchange rate offered to understand the total cost of making this payment. So let us get
into that now.

What it really cost to transfer USD 25,000 from Indonesia

Local Bank T 365.0 mil

Local Bank B 363.4 mil

Wallex 362.6 mil

As you can see in the comparison above, to complete a USD 25,000 payment through Wallex - is up
to 2,411,250 IDR cheaper than other alternatives for overseas transfers from Indonesia.

Based on these cost calculations - if a similar payment was made just once a month a business
can save over 25 mils IDR annually by switching to Wallex.

14
Investree Saves 70% in Fees on
Their Cross-Border Payments
with Wallex

Investree is a B2B financial technology lend- THE CHALLENGE

ing company in Southeast Asia with a mission
While expanding business operations to In-
to use data and technology to make financing
donesia, Thailand and Philippines, Investree
more accessible and affordable to SMEs while
needed one integrated platform for financing
also connecting them with lenders who want
& business solutions.
to support them and gain an attractive return.
Through collaborations with strategic part-
Previously, Investree relied upon banks for
ners in the digital and financial ecosystem as
their overseas transfer. However, they found
well as the creation of innovative financing
several limitations in using bank services to
products, Investree commits to continuously
make transfers within Southeast Asia, and
provide various digital solutions for SMEs.
also to the US and Europe, specifically in
terms of speed and simplicity. Investree
management found the process inefficient
and wanted to maximize their productivity.

“As we expanded out of the

country, we needed fast
solutions for cross border
payments. While our banks
are great, there are limita-
tions as regard to the cross
border transactions. That
was what necessitated the
switch to Wallex”.

Liliana Bambang
Investree’s CFO.

15
Investree Saves 70% in Fees on Their Cross-Border Payments with Wallex

THE APPROACH Having 5 to 10 international transactions

each month, making speed of process is
To optimize the company’s productivity while
very critical to the company especially for
continuing to drive growth with their inter-
interest payment.
national operations, Investree looked for a
non-bank alternative and decided to choose Moreover, Wallex’s rate is almost the same
Wallex. with rate of competitive banks.

Wallex is a fintech based alternative to the

“Now we’ve got a simplified method
traditional route of making payments, offer-
to make transactions coupled with
ing rates that were better than the Bank’s,
excellent speed and rates.”
with cheaper fees and the faster timelines for
delivery of funds - through their Wallex Busi-
ness account.
2. Simplicity
After being properly set up within Wallex’s By using Wallex, Investree can easily con-
online ecosystem, Investree’s Finance team figure and make payments anywhere and
was able to make the end to end overseas anytime. Thanks to Wallex’s simple yet
transfers 24/7 from the comfort of their office powerful FX capabilities, Investree can
(or home!). Right from funding the payment manage and change the needed curren-
to executing the transaction with a particu- cies for their global payments.
lar exchange rate. Although everything was
done online, Wallex provides a dedicated
account manager to assist with any transac- “We needed a simplified method as regards

tion process. to cross border transactions. So what we

found in Wallex is that Wallex provided
Investree with simplicity and it has a fast
SLA response times in responding to issues.”
THE RESULT
Investree has saved up to 70% in fees on their
cross-border payments. Investree’s expan-
3. Support
sion across the region warranted a quicker
solution for their cross-border payment, and Wallex offers quick responses from
they are glad they switched to wallex. dedicated account managers based lo-
cally and virtually to give guidance on any
Why Investree Switched to Wallex query - big or small.

1. Speed
“Despite rapid digitization in this industry,
Wallex is fast! After switching to Wallex,
we’re happy to have a dedicated account
Investree is able to save 1-2 business
manager - kudos to Wallex for retaining
days on every cross-border payment.
human services!”

16
Wallex Simplifies
Overseas Payments

Wallex is an affordable and secure payments

solution for businesses.

Businesses of all shapes and sizes use a

Wallex business account to make cross
border payments in over 47 currencies to
more than 180 countries from one secure
online platform.

Future forward companies like Investree, Style

Theory, CodePay, Ismaya Group, Marugame
Udon and 20,000+ customers in Asia made
the switch to Wallex, trusting us to transfer
over USD 2bn in customer funds across
borders.

If you would like to know more about

how Wallex can help your business,
visit www.wallex.asia to schedule a demo.

17