Global Payouts: Best Practices for Cross-Border Payments

Global payouts are crucial for organizations with remote teams, international operations, and global suppliers.

However, managing international payments introduces complexities, including legal and tax issues, data protection regulations, and fluctuating exchange rates.

Thunes simplifies and accelerates global payouts for businesses across industries. Our vast payment network enables companies to expand their reach and streamline cross-border transactions.

In this guide, we’ll explore the fundamentals of global payouts, the challenges businesses encounter, and best practices to enhance the efficiency of international payments.

Table of Contents

Understanding the Basics of Global Payouts

Global payouts are when businesses send money to beneficiaries in a different country. Companies often have to initiate cross-border payouts to pay supplier invoices, employee payrolls for a remote workforce, gig and on-demand workers, and customer refunds.  Organisations also make global payouts for crypto exchanges and marketplace transactions.

Various payment methods are available for global payouts, the most popular of which is sending funds directly to a bank account or digital wallet. 

However, for cost-effective, convenient and efficient handling of payouts to beneficiaries worldwide, there are several considerations. 

Key Challenges in Cross-Border Payments

Here are the top hurdles businesses and organisations face when making payouts to different countries. 

Navigating Legal Complexities

Managing global payments can involve various legal considerations. Each country has differing legal systems, making it complicated for organisations to comply with these laws, especially if they pay across multiple countries. For instance, data protection laws differ from country to country, and infringements can result in compliance issues and high expenses in hiring domestic and international counsel to guide companies. 

Businesses sending international payments must mitigate the risk of legal implications by understanding the global legal infrastructure of various payment systems worldwide. Likewise, these companies must stay ahead of domestic and international legal policy changes and ensure they respond to them in managing their payouts.  

Managing International Tax Obligations

Similar to varying legalisation between countries, taxation also differs. Over the years, some countries have devised taxation treaties to avoid double taxation between buyers and sellers. However, these treaties are specific to each country, and not all recipients and payees might be exempt.

As a result, businesses must consider the tax implications of the destination country they are paying to. This factor is imperative to ensure transparency and fairness between them and the payment party. It also helps them accurately measure profitability. 

Ensuring Global Data Privacy Compliance

Most countries have data protection regulations, albeit their specific laws may vary. Companies must understand their rules and the countries they’re sending money to. This information ensures they have sufficient security measures to avoid compromised user data and hefty penalties.

For example, in the UK and EU, the General Data Protection Regulation (GDPR) prevents any business or financial institution processing personal information for citizens from sharing this data. GDPR penalties can be extremely hefty, highlighting the importance of robust data security in initiating and tracking payments to recipients worldwide. 

Handling Fees and Exchange Rate Fluctuations

Another critical challenge of global payments is the cost of currency conversions. Initiating payouts in multiple currencies often requires the payee (a business) to provide the funds upfront and begin the transaction. Companies must anticipate how much the currency conversion and payment solution will cost to initiate payouts.

Of course, currencies fluctuate, making it complicated for businesses to forecast how much money they will spend on international transactions.

The Best Practices for Managing Global Payouts

These are the best strategies companies must implement to initiate cost-effective, secure and streamlined global payouts. 

Leveraging Technology to Streamline Global Payouts

Automation technology is the key to operational efficiency for companies that manage high volumes of real-time payouts. Regardless of the payment method, businesses sending mass global payouts must implement technology to streamline these transactions, maintain data security and stay ahead of FX exchange rates. 

At Thunes, we make it easier and quicker for organisations to use pay-to-wallet and pay-to-bank options. Businesses can rely on real-time, instant payouts with immediate settlement times. This advantage enables companies to deliver optimised customer experience or boost employee morale through a quick, reliable payout solution.

Thunes also provides transparent pricing and FX rates without intermediaries and hidden fees. With complete transparency, organisations can send payouts at competitive rates. 

Staying Compliant with Global Payment Regulations

Another imperative strategy for global payouts is satisfying regulatory requirements. Maintaining compliance is critical to avoid hefty fines and penalties. Moreover, comprising beneficiary information can have dire consequences for every party involved in the payment process. 

One of the primary regulations governing global payouts is anti-money laundering (AML) compliance. This standard requires businesses to establish procedures that prevent money laundering. They can achieve this by verifying customer identities through Know-Your-Customer (KYC) processes.

To avoid payment errors and ensure global payouts reach the correct bank accounts, Thunes has global licences in:

• USA
• France
• EU
• UK
• Singapore
• Hong Kong 

How to Choose the Right Global Payout Partner

The payment platform organisations opt for must support various payment rails and payout providers. Because different regions have various laws, taxation standards and data protection regulations, cross-border payments aren’t interoperable. This barrier creates many problems for companies using a payment platform with a limited network because the beneficiary country may not support this rail.

Thunes has an extensive payment network with over 130 payout countries, 80 currencies, three billion mobile wallets, and four billion bank accounts. With one API, Thunes gives organisations access to seamless, quick, instant payouts no matter where their customers are.  

Maintain a Robust Data Security Infrastructure 

A sound data security infrastructure must be an ongoing process for international payouts. Businesses must ensure payouts reach the correct bank account and beneficiary information is secure. In addition, they must implement strategies to avoid data breaches, money laundering and regulatory non-compliance.

Many cross-border platforms like Thunes have robust security measures to prevent these risks. Organisations can rely on data encryption to shield sensitive data and tokenization to strategically replace sensitive information so the original information is not restored. Multi-factor authentication is also essential, ensuring that payments are initiated through two or more authentication methods. 

Case Studies: Successful Global Payout Solutions

Thunes has helped many organisations to deliver effortless global payouts through a single API. 

Here is how we’ve helped various companies establish streamlined global payout infrastructures that give them more control and faster access to funds. 

PayQuicker

PayQuicker is a global payout solution based in the US, facilitating instant payouts worldwide and disbursements in local currencies. PayQuicker supports various payout use cases from affiliate marketplaces, on-demand and gig workers, sales programs, and accounts payable. This company faced a significant challenge in their Payouts Orchestration API — they needed to add more digital wallets in their infrastructure and required a payout partner to achieve this while meeting compliance and AML regulations.

Integrating Thunes, PayQuicker could support payouts for various digital wallets. We streamlined the integration process and onboarding with our Thunes’ Money Transfer API.

The Results:

• PayQuicker can offer its clients access to over 120 digital wallets and APMs worldwide
• Its customers’ beneficiaries could receive payouts instantly
• PayQuicker’s clients can operate in more global markets through increased mobile wallets

Pomelo

Pomelo is a US-based credit card issuer and remittance company. Unlike traditional payout solutions, such as banks and transfer services, Pomelo underwrites its customers, giving them a credit line to front the cost of their remittance fees to The Philippines. Pomelo issues this credit line on its own unique cards, and customers can support up to three friends or family members.

However, Pomelo found that most recipients in the Philippines remain underbanked, making accessing their cards challenging. The company integrated with a payment platform like Thunes to support payouts to popular digital wallets, like GCash. Thunes worked with Pomelo to establish and review the API and technical setup for GCash. 

The Results:

• Pomelo enhanced its product functionality by enabling payouts from the Pomelo app into GCash wallets
• Improved the customer experience while diversifying its payout methods
• Working with Thunes makes it easier for Pomelo to achieve its mission of fostering financial inclusion in emerging markets worldwide 

Flip

Flip is an Indonesian payment platform that serves over ten million users and offers various financial solutions. These solutions include interbank transfers, e-wallet top-ups, and worldwide payouts. Countless organisations use Flip for employee payroll, supplier payments, customer refunds, and global transfers. While Indonesia’s economic landscape is rapidly evolving, Flip needed a payout partner to improve customer experience, the quality of transfers, and remittance costs.

By integrating Thunes, Flip could expand its reach through Thunes’ global network and payout functions. Flip could offer faster, more affordable and reliable payouts through one API. 

The Results:

• Between Q4 2021 and Q1 2022, Flip doubled its transfers
• Flip could facilitate payouts to 45 countries
• Thunes transformed Flip’s customer experience, making worldwide payouts as quick and effortless as possible

Simplify Your Global Payment Processes with Thunes

Global payouts are an integral part of many companies’ payment infrastructures, whether that’s to allow them to tap into worldwide markets or pay employees. However, making global payments also comes with many challenges, including legal problems, tax issues, data protection, and fluctuating exchange rates. 

To overcome these barriers, companies must leverage technology to automate mass payments and maintain compliance. They should also find a payment solution with extensive payout providers and ensure robust data security. 

With Thunes, companies can streamline their worldwide payouts, access a broad network of payment partners and send payouts at competitive FX rates. 

Ready to send global payouts with Thunes? Contact us today.