4 Ways to Send Money to a Business Partner Whether for a supply chain payment, a joint venture investment, or paying for services rendered, businesses need secure, efficient, and cost-effective ways to transfer funds. If they don’t have those means, potential partnerships can fade away while existing ones lie in tatters.
Even if you can’t afford to pay business partners, there are still (mostly unpleasant) measures they can take to get what they’re owed. Late settlements are a sign of incompetency, and though firms had a degree of flexibility and understanding for tardiness during the pandemic, few excuses will be valid anymore.
Prompt transactions are the only way forward. There are multiple avenues firms can go down here, and some options will invariably be better than others.
We’re not going to discuss the best way to send money to a business partner below. That’s because its requirements are situational. So, instead, we’ll explore different scenarios where certain payment options may appeal more than others.
Bank Wire Transfers They have long been a trusted method for business transactions. Wire transfers are facilitated directly between banking institutions, making them a highly secure option for large transactions.
To initiate a wire transfer, the sender must follow a series of protocols. They need the recipient’s account details, including the account number, routing number, and the bank’s SWIFT or BIC code for international transfers. While these can be arranged online or over the phone, some banks may require the sender to visit a branch in person for authentication and security purposes.
Silverbird also helps with borderless payments for global businesses and non-UK residents. Founded by CEO Max Faldin, these experts provide all the details for bank transfer requirements , ensuring there are no grey areas in your understanding. You can also learn what details are needed to receive money, too. Furthermore, if you like, you can open online business accounts with them, too, to facilitate faster transactions with your partners all over the world.
One of its significant advantages is the security they provide. Since reputable financial institutions facilitate them, they are less likely to be affected by fraud or other security issues.
Digital Payment Platforms The emergence of these platforms has transformed the way businesses transact. A few examples are PayPal, Square, and Stripe which allow businesses to send and receive money online.
They often require both parties to set up accounts, connecting them to their respective bank accounts or credit cards. After the setup, sending money is as simple as entering the recipient’s email address or phone number associated with their account.
These platforms offer a significant level of convenience and speed. The pandemic only elevated their popularity as people felt less comfortable, or were entirely unable to visit brick-and-mortar stores or partners in person. They often provide instant or near-instant transfers and are accessible from any device with an internet connection.
Additionally, they sometimes have lower fees than wire transfers, especially for domestic transactions. However, businesses must be vigilant about security when using these platforms and ensure that they follow all recommended security protocols. It’s better to be safe than sorry, so other strategies are recommended unless you completely trust the digital payment platform.
Blockchain and Cryptocurrency Transfers The growth of blockchain technology and cryptocurrencies like Bitcoin and Ethereum has struck a new way to transfer funds. Blockchain transfers have various benefits: they are fast, often cheaper than traditional methods, and provide high transparency.
Both parties need a digital wallet when using cryptocurrency to send money, and the sender requires the receiver’s wallet address. Once the transaction is initiated, it is recorded on the blockchain, a public ledger that makes the transaction transparent and hard to alter.
However, the volatile nature of cryptocurrencies might pose risks in the fluctuating value of transferred funds. Despite more people owning crypto assets , these measures are under constant scrutiny, with new rules and regulations being enforced routinely. Therefore, it is crucial to be well-informed about the market and any potential risks before opting for cryptocurrency transfers.
Trade Finance and Letters of Credit Trade finance and Letters of Credit (LCs) are commonly used in international trade. An LC is a guarantee from a bank that a buyer’s payment to a seller will be received on time and for the correct amount. If the buyer cannot make the transaction, the bank will cover the full or remaining amount.
This medium provides a safety net for both parties. The seller is certain of payment, and the buyer may receive goods or services even before it is made. Although, LCs can be difficult to arrange and usually involve many parties, including the accounts of both parties, a shipping company, and potentially a customs agency.
Conclusion The best approach for sending money to a business partner is hinged on various elements such as the transaction’s size, the urgency of the payment, the countries involved, and the trust factor between the parties. It’s always rational to analyze all accessible alternatives, including their pros and cons, to choose the most appropriate method. As the business landscape continues to grow, so do these methods, and businesses must stay abreast of these changes.
