When it comes to international B2B payments there are not a great deal of options. In almost all cases the importing company will simply initiate a payment with their local bank, which will then send the money to the exporter's bank, possibly through some intermediary banks. Each bank will want to make money on the transaction. Consequently the incurred fees are at least 3% and can at times even exceed 6%. Considering that most profit margins are not very big for global companies in competitive markets there is a huge potential for savings. This is where B2B Pay offers a possibility.
Growth of Global
With the exception of 2009 global trade has been growing year on year for the past two decades.
Your own European payments account
With B2B Pay global exporters can get their own European IBAN number, which you can include in invoices. The European importer can do a simple SEPA transaction and when the money arrives in your European account B2B Pay sends the money for a very low fee to your local bank account. We're powered by Barclays, Nordea and Techstars.
B2B international payments
B2B payments are almost always handled by the importer's house bank. When exporting to Europe that means that the importer will initiate the payment through one of the 200,000 banks in Europe. Often there will be an intermediary bank in the European country, and then another intermediary bank in the country of the exporter. Each of these banks needs to make money on the transaction.
Spread costs on global B2B payments
When contacted almost all banks there is only a fixed cost incurred for a transaction. Usually around 30€. This however is only a small part of the story and of the actual costs. If you inquire about the specific exchange rate used for sending money you'll find out that there is a huge gap between the buy rate and the sell rate. That is called the spread. For international transactions banks take 3%, which means there's a 6% spread. The total spread can be over 10%!
Now if you want to make an international transfer of 10 million euro you can call up you bank and get a much better rate. B2B Pay is offering international B2B payments with exchange rates much closer to the mid-market price. The total costs of our transactions from Europe to India are below 1%, saving an Indian exporter 250€ on a 10k€ transaction.
Cross border payments for B2B
Cross border payments for B2B can be expensive.
These are the various types of cross border payments:
- B2B supplier payments
- E-commerce purchases, including digital goods
- Payroll, benefits and retirement payments, most often C2C, but this also includes B2B-type payments to contractors for digital work
- Remittance: payments made by foreign workers to family in home countries, measured by country pairs, or "corridors".
The size of global B2B payments
According to WTO and World Bank sources global trade amounted to between 13 and 15 trillion USD in 2009.
EU B2B cross border payments
Within the European Union most B2B cross border transactions are paid in Euros and handled through SEPA, which has greatly simplified payments. It's now as simple to make a euro payment within a country as within the EU.
According to Eurostat and the WTO the EU is the biggest trading block and it accounts for 16% of the total world imports and exports.
For 80 countries the European Union is the top trading partner. The United States are the top trading partner for just over 20 countries.
Save 80% on cross border payments
B2B Pay provides a payment solution to global exporters to Europe that saves 80% of the fees and bureaucracy. The exporter gets their own IBAN number inside the EU, which can be used to receive payments from 34 countries. When the money comes in (through a simple SEPA payment) we send it to the local bank of the exporter for a fee of 1%.