International credit card payments have become essential to conducting international business. They allow individuals and businesses to make purchases from anywhere in the world.
In this article, we will explore the concept of international credit card processing. We'll include discussions on payment types, accepting payments, best practices, and Wise Business as an option for operating in the dynamic international payments space.
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International Card Payment Types
There are various types of international credit card payments. Understanding their differences is crucial for both consumers and businesses.
1. Single-Currency Cards
These are traditional credit cards that can be used only in the currency they were issued in. If you have a US dollar credit card, you can only use it to make purchases in the US. Or it could be used in countries that accept US dollars as a form of payment.
2. Multi-currency Cards
These cards allow users to hold many currencies on one card. This makes it easier to make purchases in different countries. You also don't have to worry about currency conversions.
3. Prepaid Cards
These are like debit cards, where users load a certain amount of money onto the card before using it. This type of card is ideal for travelers because they can avoid foreign transaction fees. They also have better control over their spending.
4. Dynamic Currency Conversion (DCC)
DCC allows customers to choose which currency they want to pay in at the point of sale. While this may seem convenient, it often comes with high exchange rates and hidden fees. This makes it more expensive than paying in the local currency.
This is an overview, but there are some significant differences in how each of these cards works.
Single-currency cards may offer better exchange rates. But they come with foreign transaction fees. Multi-currency cards may have higher foreign transaction fees. But they provide convenience and flexibility for international purchases.
It's essential to do your research if you plan to choose one of these services. Or if you are serving customers who often use these services, take note of which ones they prefer. Make sure to accommodate those services well.
How to Accept International Credit Card Payments - Best Services
There are various international credit card payment processing options. Each has its benefits and drawbacks. Here are some options you can choose as your international credit card processor:
1. Wise Business
Wise Business is here to provide a quality account that not only lowers your fees but also helps you run your business more efficiently. Let's take a look at some of the key parts of the Wise Business account.
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Receive payments
Wise also lets you receive payments in multiple currencies. With a Wise account, you'll get unique account details for global currencies, including USD, GBP, EUR, CAD, AUD, JPY, and more. This way, your clients can pay you just like they pay a local, and there's no need for costly fees on your end to receive your hard-earned funds.
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2. PayPal
This is one of the most used online payment systems. PayPal allows users to send and receive payments in many currencies. It also offers fraud protection and secure transactions.
PayPal charges several fees for receiving international payments. The main charge is 1.50% of your transaction on top of standard transaction fees. They also have a fixed fee that depends on the currency you use.¹
Find out how Wise Business compares to PayPal on International Payments:
The true cost of sending USD to GBP
3. Stripe
Stripe is a global payment processor that supports a multitude of currencies. It is a popular choice for credit card processing international customers need.
Stripe charges an extra 1.5% on top of their 2.9% + $0.30 per transaction for use of international cards. They will also charge an extra 1% if the transaction requires a currency conversion.²
4. Square
Square is known for its point-of-sale system. With it, businesses can accept credit card payments from customers around the world. They also offer competitive rates and fraud protection.
Square is upfront about its fees. But they don’t state anything about international payments. While you can hope this means there are no international fees, it’s usually not so simple. As a baseline, you will be paying 2.6-3.5% + $0.10-$0.30 per transaction, plus potential extra fees.³
5. Amazon Pay
Amazon Pay is an extension of the popular online marketplace. Customers use their existing Amazon account to make purchases on other websites. It also supports many currencies and offers buyer protection.
Amazon Pay’s cross-border fee is anywhere from 0.4-1.5% on top of standard transaction fees, which are 2.7% + $0.30. They also charge “a currency conversion spread set at 0.5% above the wholesale exchange rate”.⁴
What is the Best Way to Make International Payments?
Four international credit card payment types are the most popular. Each comes with its own set of features and benefits. Some of the most common types include:
1. Credit Cards
These are traditional credit cards issued by banks or financial institutions. They can be used for purchases internationally. Users can make payments in local currency. Then, the transaction will be converted to their home currency. This is done at a prevailing exchange rate.
2. Debit Cards
Like credit cards, debit cards allow users to make purchases. This time, they use funds from their bank account. But not all debit cards may be accepted for international transactions.
3. Prepaid Travel Cards
These are prepaid foreign currency cards. You can load them with a specific amount of money. They are used for transactions in the designated currency. They offer the convenience of credit cards without the risk of overspending.
4. Online Payment Platforms
These are platforms such as PayPal, Stripe, and Wise. They allow users to make international payments. You would use your credit or debit cards, bank accounts, or e-wallets. These platforms often have lower fees compared to traditional banks. They also provide an added layer of security.
We've considered these top forms of international payment options. Online payment platforms are the most efficient way to make international payments. They offer competitive exchange rates and low transaction fees. They also provide a secure and convenient way to make cross-border payments.
Credit cards may be more widely used. But they often charge higher fees. They are also subject to foreign transaction fees imposed by the issuing bank.
About Wise Business: Receiving and Sending International Transfers
Founded in 2011, Wise Business is on a mission to make it easier and cheaper to move money around the world. Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks.
In addition to offering international payments at the mid-market exchange rate, Wise Business offers an international account that lets you store money in more than 40 currencies.
Also, you can get your own virtual account details for receiving local transfers in the US, the EU, the UK, Australia, Canada, Japan, and more. You can sign up for free, pay a simple one-off fee for account details, and there’s no monthly fee to worry about.
If you need to make mass payouts to international contractors, make batch payments with Wise Business - with just a single file upload.
High limits
Depending on which state you’re located in and where you’re sending money to, you could send as much as $1,000,000 in a single transaction with Wise. If you’re sending money in batches, you can send a lot more in total.Low cost
How to pay international contractors? Simply, fast and as cheap as possible. Compare the prices of Wise with other providers and see what fits your business the best.
Convenience
Once you open your multi-currency account you can pay your international contractors in 80 countries. If you need a local account to receive money and allow your customers to pay you in their own currency, get account details (such as a routing number, IBAN, sort code and more).Online
You might wonder what's the best way to pay contractors online. With Wise Business there's no need to visit a branch or call anyone up. Everything happens online.Your recipient gets notified
If you enter your contractor’s email, they will get an email once you’ve paid them, which is good for their peace of mind as well as yours.Your recipient doesn’t need a Wise account
When you use a solution like PayPal, your recipient will need to sign up to get hold of their money. Not so with Wise — it goes straight into their bank account.Bulk payment options
One of the best ways to pay international contractors -if you have many- is to make mass payroll payouts with Wise Business.Great exchange rates
You’ll get the mid-market rate like you see on Google, which should save you and your overseas contractors a lot of money. You aren’t likely to get that from a bank.End payments in US dollars or local currency
In most countries, you can pay your international contractors in either the local currency or in US dollars.Secure
Wise is regulated by the financial ruling bodies in each country it operates.
Get local account details to take card payments
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Sources used :
Sources last checked on 31-January 2024.
*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information. This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional. We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
