International business payment terms every merchant should know

International business is having a big impact on the world economy. According to recent data from the World Bank, international trade accounted for over 50% of the world's GDP.  

In the UK alone, London was recorded to have had the country’s highest trade surplus in 2021, at £51.6bn, driven by international trade – such as service exports in the financial and insurance industries.  

For business owners conducting business across borders, making international payments is an inevitable part of the complex process – and it also comes with industry-specific terminology that can add to its difficulties. Therefore, arming yourself with the right vocabulary is essential in navigating the global business markets.  

Let's delve into the five key terms every merchant needs to know to navigate the global business landscape effectively:  

1. SEPA 
2. SWIFT 
3. FX 
4. Trade finance  
5. International business account. 

If you’re conducting business operations in Europe, it's highly likely that you’ll have come across the term ‘Single Euro Payments Area’ or ‘SEPA’. SEPA is a payment integration initiative that simplifies cross-border Euro transactions within the European Union, European Economic Area, and select connected markets. It enables businesses to make and receive payments in euros across Eurozone borders as easily as they do domestically. There are currently 36 members of SEPA. 

With SEPA, all euro payments are treated equally. Therefore, if a talent agency based in France needed to pay salaries to its employees in Amsterdam, for example, using a SEPA payment integration would make this transaction much smoother.

The Society of Worldwide Interbank Financial Telecommunication, or SWIFT, is the name of the international payment network made up of over ten thousand financial institutions across the globe. It is overseen by G10 central banks and made up of countries like Belgium, the United Kingdom, Canada, Italy and Japan, to name a few. The network was established in 1973 and has now become a popular method for sending money quickly and safely across borders.  

There are usually exchange rate fees, of around 2% to 5% for SWIFT transfers which can be off-putting for SME owners. Thankfully, when you use a 3S Money International Business Account, it costs $0 to receive a SWIFT payment and only $1 to send one. Check your eligibility for a 3S Money business account and be approved for an account in as little as fifteen minutes today. 

Another popular term you may have come across in your international business endeavours is trade finance. Trade finance is considered the backbone of global commerce and refers to the financing and management of international trade transactions.  

Trade finance solutions, such as letters of credit and export credit insurance, mitigate the risks associated with cross-border trade, ensuring that goods are delivered, and payments are received on time. This is especially important for import-export businesses and manufacturers dealing with suppliers and buyers in different countries.

Any business with plans to conduct operations across the globe should be familiar with the term ‘International business account’. An international business account is one that allows you to collect, hold or transfer funds across the globe for commercial purposes.  

There are many ways to send and receive global payments, but for local businesses with regular overseas expenses, such as taxes and salaries, an international business account is the perfect solution. 
 
Key benefits include cheap, fast, and secure cross-border payments — with a 3S Money International Business account, for example, you can access over 65 currencies in 190 countries across the globe, all on one local dashboard.  

Navigating global business can be tricky, but by understanding these key terms, you'll be better prepared to seize opportunities and overcome business challenges across international borders.  

Ready to reach your global clientele and expand business across borders with ease? We're here to help. Open an account with 3S Money today.