When you enter a new region, you get new opportunities to make more sales – but you also have to overcome new challenges. These can include paying sales taxes in other countries, offering local customer service, handling fulfillment and logistics, maintaining your supply chain, and dealing with payments in different currencies.
We’re here to explore just one of these issues — cross-border payments. If you feel stressed just thinking about foreign currency exchange, don’t worry. With the right online payments solutions, your cross-border payments can be made simple and hassle-free. Here are 4 ways to reduce fees and simplify payments in your cross-border Amazon business.
1. Use local bank accounts to withdraw your funds
You can avoid paying high foreign exchange rates to convert your cross-border sales into your home currency by withdrawing funds into a local bank account of the country you’re selling in. The only trouble is that it can be extremely complicated to open up a business bank account in a country where you aren’t a resident. In fact, sometimes it’s just not possible for online sellers.
That’s where Payoneer’s receiving accounts come in. These allow you to open up a local receiving account in multiple different currencies, including EUR, GBP, USD, CAD, JPY, AUD, and MXN. It functions exactly like a local bank account, so you can accept payment in multiple currencies directly to your Payoneer account, without paying high foreign exchange fees or opening a local bank account.
2. Pay VAT without paying commission
When you sell on any European Amazon marketplace, like Amazon.co.uk, Amazon.fr, or Amazon.de, you’re obligated to pay VAT, which is European sales tax, to the tax authorities. But when you pay VAT in a foreign currency, you’ll also have to pay commission on the currency conversion, transaction fees for paying in a different currency, and probably lose money through high exchange rates.
That’s why it’s better to use a local bank account or your Payoneer account to pay your VAT obligations without paying commission. Payoneer can hold your revenue in local currency until it’s time to pay VAT, or save you money by converting it into local currency without commission and at competitive rates.
3. Pay suppliers and providers commission-free
Your cross-border Amazon business doesn’t run in a vacuum. You have suppliers in different countries, dropshipping providers, and service providers who help you design your store, manage your product listings, or handle local customer service. They all want to be paid but you don’t want to have to pay commission.
Turn to Payoneer’s Make a Payment service to pay everybody with zero commission. As long as your service providers and suppliers also have a Payoneer account, they can easily request payment in their currency, and you can enable the payment from your account without paying SWIFT bank transfer fees or foreign exchange costs. If your service providers and suppliers don’t use Payoneer, that’s not a problem at all – you can pay them via bank transfer for a small transaction fee, directly from your Payoneer account.
4. Use a payment platform with an inbuilt FX feature
It’s ideal to use a cross-border payment platform that doesn’t only support multiple currencies, but that has foreign exchange capabilities built into it. After all, the whole point is to support cross-currency transactions. Payoneer offers foreign currency exchange for as little as 0.5%, which makes it easy for sellers to change available funds as needed to pay their suppliers, VAT obligations, local accountants, and any other cross-border costs.
Payoneer cuts the fear of cross-border fees
There is no need to let fear of extra fees hold you back from expanding your Amazon business into other countries and regions. Payoneer has the solutions to save you from unnecessary fees, and help you keep more of your profit to grow your business.
Don’t have Payoneer account yet? Sign up now and get $50 bonus after receiving over $1000 in total from Amazon!