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Streamline Cross Border Payments for Your Business with Skydo

How You Can Streamline International Transactions for Your Business
anoosh-kotak
Anoosh Kotak19 December 2023

Consider a scenario where an innovative tech startup in India has designed a groundbreaking software solution coveted by clients worldwide. To seize global opportunities, the company must seamlessly transact with partners in different currencies, navigate diverse regulatory landscapes, and wrestle with the ebb and flow of exchange rates. This intricate ballet of elements underscores the complexities inherent in cross border payments.

For these Indian tech exporters, the efficacy of these cross border payments holds the key to unlocking their full potential. The impact is not solely monetary – it resonates through every facet of their operation. In this interconnected world, the efficiency of international transactions isn't just a matter of convenience; it's a strategic imperative.

Understanding the Landscape of International Transactions: Navigating Payment Channels

The world is at our fingertips, yet the complexities of this global exchange often lurk beneath the surface. Let us discuss the different international payment methods, unraveling the threads of traditional channels and digital platforms while unveiling the challenges that can hinder the smooth flow of cross-border transactions.

Traditional Channels: Bank Transfers and checks

Bank transfers and checks have long been the pillars of international trade, trusted by businesses to facilitate cross border payments. Bank transfers, while reliable, can be a maze of intermediary banks, each taking their slice of the payment, resulting in high transaction fees that can eat into profits. 

One significant component of these fees is the SWIFT (Society for Worldwide Interbank Financial Telecommunication) fee.

SWIFT fees can be a significant burden for businesses engaged in cross-border transactions, ranging up to USD 40. The fee depends on various factors like the destination, intermediary banks involved, and the currency being exchanged. These fees can quickly add up, eroding profits and making international trade less cost-effective.

Furthermore, the fund transfer across these networks is far from instantaneous, often spanning several days or weeks before reaching the intended recipient. This sluggish pace can hamper businesses that require timely payments for operations, supplier relationships, and more.

Cheques, though a time-honored method, often introduce additional complexities. They're subject to international mail delays, manual processing, and the uncertainty of clearance times. These factors collectively create an environment ripe for delays and disputes, eroding the reliability of this channel.

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