Paying International Suppliers – What You Need To Know
There are many things to consider when paying international suppliers. For example, almost every country requires unique informational items to be included in every payment instruction due to local banking regulations. These items are required to complete a payment via wire, ACH, or any other payment method.
Below is a quick look at some examples of informational items required in some countries:
– United Kingdom – SORT Code
– India – IFCS Code
– US – ABA Routing Number
– China – Payee Telephone Number
– Russia – BIK code
– European Union (majority of) – IBAN
– Ukraine – Tax ID
– Israel – Bank and Branch Number
Just looking at this small selection of countries gives us a glimpse of how many variations of bank codes are needed in order to deliver a payment, accurately and on time. Some may think that it’s simple to manage these various bank codes, but we’d caution those people to consider number of payments due at the same time and on a global scale. Managing hundreds of payments can become arduous. Having the necessary information in order to complete automated international payment via any electronic form of payment is very important, as it saves time, money, and effort that would otherwise be consumed by manual payments.
The further you look into things, the more that you’ll start to see the intricacies. For example, when looking into the UK’s Sort Code, you’ll find that Ireland operates on what is called the National Sort Code, which is regulated by the Irish Payment Services Organization or IPSO. While England and Ireland both subscribe to the same format, they are overseen by completely separate financial entities due to the fact that each country operates on their own unique banking system. How about the Indian Financial System Code (IFSC)? Did you know that two main electronic funds settlement systems in India utilize it? Both the National Electronic Funds Transfer (NEFT), as well as the Real Time Gross Settlement (RTGS) uses the IFSC to facilitate electronic fund transfers. With each country, there are details that need to be tended to; without doing so can result in late payment, bounce backs, and a myriad of other issues. Point being — there’s a great deal of particulars to be aware of when facilitating mass pay outs to various territories around the world. It’s safe to say that things can get a bit mucky if a business isn’t set up to address the requirements for each country to which payments are being sent out.