Cross Nat'l Border Payment

[JMN]

Ok, so, hypothetically, how would I pay a Canadian, German, whereverian, for services rendered.

Exchange rate at the time of paying? Time of invoicing? I know it basically comes down to let Uncle Visa worry about it, but I want to understand. And I still write checks and use stamps whenever I can.

I am a financial idiot, so please type slowly.

 

[vurban210]

It all depends on what currency you are paying in. If you are paying in Canadian dollars then your price is in Canadian dollars - if you are paying in Euros then your price is in Euros. The exchange rate is not your suppliers problem, it's your problem.

Some companies - mostly in Asia - prefer to be paid in US Dollars. So it would be an international US Dollar wire transfer.

You can't send a check drawn on a US bank to a Canadian company or European company and expect them to do anything with it. Well technically you "can", but no company will want to do business that way. There are fees for checks drawn on foreign banks plus lengthy waiting periods. And not all banks will honor checks from every foreign bank. Just don't even bother trying to go this route.

Depending on how much it may be easier to use something like PayPal. If you use a credit card to pay a foreign company, in a foreign currency, be sure to check the terms and how they set their FX rate.

I've traded foreign currency for many years and done business in over 30 countries. Many, many millions of dollars of transactions. It is a whole thing in itself but for smaller transactions there are many options these days that have brought down the costs.

 

[JMN]

It all depends on what currency you are paying in. If you are paying in Canadian dollars then your price is in Canadian dollars - if you are paying in Euros then your price is in Euros. The exchange rate is not your suppliers problem, it's your problem.

That seems obvious, but I hadn't thought of it. Well, not directly. I wouldn't want to figure out what to do with Sweedish Crowns either. Especially since it's not a built in part of my fees for doing business. (no offense Swedes, just first thing that came to mind)

Some companies - mostly in Asia - prefer to be paid in US Dollars. So it would be an international US Dollar wire transfer.

Ok, so the recipeint may actually want payment denominated in US dollars. That was unexpected, but I guess some would want a 'hard currency'(ha!) or having funds in a specific currency to buy things with makes sense for preventing the issue altogether.

You can't send a check drawn on a US bank to a Canadian company or European
company and expect them to do anything with it. Well technically you "can", but no company will want to do business that way. There are fees for checks drawn on foreign banks plus lengthy waiting periods. And not all banks will honor checks from every foreign bank. Just don't even bother trying to go this route.

Okay, this makes total sense, and I suspected it may be a problem which is why the question being that going out of town sometimes people won't take a non-local check. In currency usage here we rarely get a Canadian quarter or other coin denomination which is usually just treated as a US quarter by most places, but checks are all kinds of different.

Depending on how much it may be easier to use something like PayPal. If you use a credit card to pay a foreign company, in a foreign currency, be sure to check the terms and how they set their FX rate.

Thank you! I understood that well enough, and there's enough for me to go teach myself more now. Does fx mean Foreign Exchange? It seems like a good guess, but ...

If you wouldn't mind one more question. Would one of my banks be a good place to ask for help, or a more likely a trap with higher percentage fees for the service.

 

[vurban210]

Okay, this makes total sense, and I suspected it may be a problem which is why the question being that going out of town sometimes people won't take a non-local check. In currency usage here we rarely get a Canadian quarter or other coin denomination which is usually just treated as a US quarter by most places, but checks are all kinds of different.

Yes, FX is foreign exchange.

Checks are different because you would be sending a check drawn on a US bank, in US Dollars to a foreign bank. It just doesn't work that way. The only time you might see something close is when a company, say a Canadian company, has an account set up that is in US dollars and the checks they send to US companies are drawn on that account. Everything is done electronically these days.

I'm sure your bank can help. I know Amex has a nice online international payments system. Typically FX payments are spot plus a percentage - say 1%. International USD wires are a fixed fee - say $20 or something like that. It all depends on volume.

At the end of the day it all depends on your transaction amounts. If you are talking less frequent and smaller amounts - I don't know, less than $1K - then just use a CC, PayPal or some other online service.

 

[JMN]

Yes, FX is foreign exchange.

Checks are different because you would be sending a check drawn on a US bank, in US Dollars to a foreign bank. It just doesn't work that way. The only time you might see something close is when a company, say a Canadian company, has an account set up that is in US dollars and the checks they send to US companies are drawn on that account. Everything is done electronically these days.

I'm sure your bank can help. I know Amex has a nice online international payments system. Typically FX payments are spot plus a percentage - say 1%. International USD wires are a fixed fee - say $20 or something like that. It all depends on volume.

At the end of the day it all depends on your transaction amounts. If you are talking less frequent and smaller amounts - I don't know, less than $1K - then just use a CC, PayPal or some other online service.

Thanks!

 

[Car 54]

Ok, so, hypothetically, how would I pay a Canadian, German, whereverian, for services rendered.
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I am a financial idiot, so please type slowly.

lol

 

[CatamountRob]

Canadians like to be paid in beer, ehh?

 

[zero_zero]

Canadians like to be paid in beer, ehh?

You got that right...eh!