How to Send Money Internationally: Top Approaches

Sending money internationally has become an essential aspect of our interconnected world, enabling individuals and businesses to effortlessly transcend geographical boundaries and conduct business across borders. On average, around $10 trillion is transferred internationally each year. 

Whether you're supporting family members abroad, conducting business with international partners, or engaging in the global marketplace, the process of money transfers abroad can be tricky. From traditional bank wire transfers to innovative online platforms, the landscape of international money transfer offers a multitude of options to suit different needs. In general, consumers look for speed, security, and convenience. 

What should you know about sending money internationally? 

Most banks and credit unions have some function or feature that allows for international bank transfers. 

Businesses often send money through an international wire transfer because it offers the safest and quickest option. However, wire transfers usually come with an exchange rate or fee that can vary anywhere from $30-$50, depending on the institution. Wire transfers can also lead to delays. For this reason, wire transfers are not the best or most efficient approach to making international payments, especially if you’re sending multiple payments across borders each week or month.

What is a remittance?

A remittance refers to a sum of money that is sent or transferred from one individual or entity to another, typically from one bank account to another. They can be sent through various channels such as banks, money transfer services like Western Union, wire transfers, and prepaid bank cards. 

Challenges of sending money internationally

Sending money internationally can come with challenges including: 

• Hidden costs and bad or foreign fees and exchange rates. Unfortunately, you might not know about fees until payment is delivered. 

• Delays. Delays are common during  bank holidays, weekends, currency conversion, global events, natural disasters, or if there is suspected fraud.

• Compliance problems. Businesses can run into a lot of problems with currency conversion and making sure exchange rates are correct between currencies.

• Bank fees. Sometimes the bank adds fees without prior notification. 

• Communication problems. Miscommunication can occur when banks are located abroad or not able to speak the native language when sending money. 

• Payment issues. Payment discrepancies between the amount sent and received can arise due to miscommunications related to unclear exchange rates. 

How to pay money to employees internationally 

Deciding how to send money to your employees and contractors internationally should come with a lot of consideration. Are you simply paying contractors a one-time payment? Do you need to figure out how to regularly pay full-time employees in Mexico from the United States? 

Here, we’ll break down some of the most common methods for paying international workers. 

Direct Bank Deposit

Using direct bank deposits to the employees' local bank accounts is a secure method. Ensure that you have accurate and up-to-date banking information for each employee. This minimizes the risk of loss or theft associated with physical payment methods.

To seamlessly deposit money in their accounts, however, you will likely need a bank account in the country, and opening one can be a tedious process.

International Wire Transfer 

International wire transfers can be a secure way to transfer funds directly to employees’ banks. 

However, make sure to use secure channels and reputable banks to guarantee the safety of the transfer. Verify the recipient's bank details at their financial institution carefully before initiating the transfer.

While this account might cost more than a standard direct deposit, you will not need an in-country bank account.

Reputable Consumer Payment Platforms

Utilize well-established and reputable online payment platforms like PayPal or similar services. These platforms are some of the best ways to send money overseas because they often offer secure encryption and robust fraud prevention measures. This is a good option for paying contractors, but not full-time employees. 

EOR

Simplify the process and reduce stress by opting for an EOR like Justworks. An EOR can help pay full-time employees in countries where the employer doesn’t have an entity. EORs already have a local bank account in the foreign country the employer needs to pay workers, so they have the ability to pay employees compliantly. 

With Justworks EOR, for instance, you don’t have to worry about high foreign exchange fees, bad exchange rates, bank fees, or other hidden fees.

Reputable Business Payment Platforms

Wise (formerly TransferWise) is a good option if you want to transfer money to contractors, or use Justworks International Contractor Payments when you are a PEO or EOR customer at Justworks. 

What should I keep in mind when sending money internationally? 

Multi-Factor Authentication 

When using online platforms, enable multi-factor authentication for added security. This requires employees to provide additional verification beyond their password, such as a code sent to their mobile device.

Encrypted Communication

When sharing sensitive information related to payroll, such as banking details, ensure that communication channels are encrypted. Use secure email services or encrypted messaging apps.

Compliance with Regulations

International payroll involves adhering to various local and international regulations. Ensure you are compliant with tax laws, labor regulations, and any reporting requirements in both your company's country and the employees' countries.

Audit Trails and Records

Maintain detailed records of all international payroll transactions. This helps in case of any discrepancies or issues that may arise in the future.

Consult Professionals

If you're not familiar with international payroll regulations, consider partnering with a global PEO or EOR that specializes in cross-border payments. They can guide you through the complexities of international payroll.

How an EOR can help pay international employees

An EOR serves as a valuable solution for businesses seeking to efficiently manage the complexities of paying international employees in countries where they lack a foreign entity. 

By partnering with an EOR, businesses can delegate the administrative burden of payroll, tax compliance, and legal obligations related to hiring and compensating employees in foreign jurisdictions. 

Ultimately, utilizing an EOR empowers businesses to focus on their core operations while ensuring accurate and compliant compensation for their international workforce.

How Justworks Can Help 

Justworks’ global EOR is the solution for small businesses looking to easily hire talent in countries where they don’t already have a legal presence. 

Justworks has direct entities in 11 countries, with the ability to hire in 100+ additional countries upon request through our trusted local partners. You can fearlessly handle HR essentials like payroll, benefits, local compliance, and more. 

Learn more about our EOR services, and get started today!

FAQ

How can I send money to someone internationally? 

There are a few different options for sending money internationally including: 

• Wire transfers

• Direct deposit

• Using an online money transfer service like Wise or SWIFT

What is the cheapest way to send money internationally? 

The cheapest way to send money internationally is to have the recipient's bank account number and direct deposit the funds into their account. 

Can you use Zelle internationally? 

No, unfortunately Zelle is only meant to send money from one US-based bank to another. 

Can I use PayPal internationally? 

Yes, PayPal is available to use and send money through in over 200 countries. However, there is usually a transfer fee associated with sending money depending on the country where the recipient lives.