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International Payments

What a pain - what's the easiest way to get paid from developing countries?

     
4:56 pm on Sep 13, 2010 (gmt 0)

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We do replicated site hosting and most of our business is in the USA and Canada... we're also in 10 other countries such as Malaysia, India, South Africa, UK, Ireland, etc etc.

In many countries, we can receive payments through our merchant account - credit/debit card (we use paypal pro.

However, we have a lot of customers who would like to pay us with wire transfer or electronic bank payment or some other options that see a little strange to us here in the ol' USA.

To complicate things, these are small transactions - less than $10 per month.

Paypal isn't quite up to speed in all of these countries, and again, not everyone has a credit/debit card.

Any ideas? Would be awesome if we had a bank in every country, but that's not really practical. Western Union is too pricy for small transactions...

I know were not the first company to deal with this problem.. any ideas would be appreciated.

-Mark
5:07 pm on Sept 13, 2010 (gmt 0)

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If they can't won't use PayPal or a credit card, then offer the option to pay by wire transfer, but only if they pre-pay 1 year or more at a time.

There may be some PayPal-like options for some of the countries, but it seems like a lot of work opening different accounts all over for small amounts of money. You may end up spending more than $10/month (of your time and/or miscellaneous fees) and generating a negative ROI. Sometimes it's best to just say no and let the customers go elsewhere.

On a related note, assuming that you're a U.S. business, remember that for each PayPal-like account that you open (if it's not in the U.S.) you may need to report it to the IRS- form TDF 90-22.1. (You need to report all your accounts if the aggregate value of all foreign accounts exceeds $10,000 at ANY time during the year.)
5:19 pm on Sept 13, 2010 (gmt 0)

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Wire transfer into our local bank... or do we need a bank account in their country?
7:23 pm on Sept 13, 2010 (gmt 0)

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>>Wire transfer into our local bank... or do we need a bank account in their country?

no you don't need a local bank account, however it will cost the user more than $10 to make an international wire transfer i should think, plus there will be currency conversion fees as well
9:04 pm on Sept 13, 2010 (gmt 0)

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Yeah, that's what I was thinking as well. Surely someone has solved this problem... we have a small ticket, but there are hundreds of people in India interested in our services. We're leaving a lot of money on the table simply because we can't seem to solve this problem.
11:33 pm on Sept 13, 2010 (gmt 0)

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Why not ask them to send 500 Indian Rupees via First-Class Mail? You colect a pile of them, take them to the main branch of your bank, and convert them to your local currency.

If electronic micro-pay systems aren't an option, cash always works. Of course I'll get the "never send cash by mail" replies, but we're taking about 10 bucks, plus it eliminates the processing charges.
11:58 pm on Sept 13, 2010 (gmt 0)

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If you do a Google search on India micropayments, you'll see a lot of buzz on the subject. Apparently, several companies have been working on solutions, but I don't know how well any of them have fared. And connecting any working solutions to international payments is a whole new can of worms...

Many companies have tried micropayments since the 1990s, but they mostly fail because of the costs and legal/banking issues often prevent reaching the economies of scale that would bring the pre-transaction costs down far enough to make things profitable.

If you think the market is big enough for you in India, talk to your bank's manager and see if he/she may have an idea for a solution that may be more offline, but still work for you.
10:16 pm on Sept 15, 2010 (gmt 0)

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May be you could tie up with a local partner who could collect money on your behalf via all the offline payment methods?

There are companies like ccavenue that will allow you to collect payments via netbanking, cash cards, cell phone (m-payment) in India apart from credit/debit cards.

Recently the biggest telecom company in India was granted a financial services license, hopefully soon, cell phone users could pay for online/offline purchases using their cell phone (no bank account required).
3:58 am on Sept 16, 2010 (gmt 0)

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The best way would be to open an account with a big PVT. sector bank such as ICICI ( with internet banking) in India ( if it is possible for you).

Then ask Indian customers to pay by NEFT ( local wire transfer, which is free for most banks in India. Some banks charge a small fee of 10 -15 cents ( Rs 5- 6) per transaction).

Those who do not have accesss to NEFT can pay by local cheque dropped into a local city branch of ICICI and the amt. gets paid in 3 days max.

I have been using this system of micropayment for the last 3 years with success in India. Of course I am based in India so it is much easier.
 

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