Channel Champion Blog

Global CurrencyAs trade continues to expand across the globe, so does the need for vendors to put in place partner-payment methods that are fast and efficient, and that comply with an ever-changing body of international exchange rates, rules, and regulations. Vendors must decide what payment method to use, and how to get help navigating the twists and turns that make payments across borders so challenging.

Generally speaking, there are two main forms of international partner payments: ACH and wire transfer. And while we’re seeing a growing demand for ACH, we think that wire transfer is a better method given the current state of banking regulations and trends in international trade.

ACH (Automated Clearing House) and its international counterpart, IAT (International ACH Transaction) use an electronic network to process large volumes of credit and debit transactions, mainly in the form of direct deposit, payroll and vendor payments. The main benefits of ACH are that it is less expensive than a wire transfer, and that it is effective for payments within the U.S. The downside is that it offers fewer international protections in terms of making sure that the party receiving payment is the correct one.

The main difference between these two methods is that ACH payments go directly from one account to another based on account numbers, while wire transfers go from bank to bank, with each bank playing an active role in the payment verification process. With ACH payments, if a partner’s bank account number is entered incorrectly, the payment will be made to whoever owns that account, regardless of the name on the account. NACHA, the National Association of ACH, has rules in place that can help reverse these payments—when the transaction takes place between U.S. banks. But if the transaction takes place internationally, it is beyond NACHA’s authority. The funds will go from one bank to another without either bank checking to make sure the money is going to the intended account.

When payments are made via wire transfers, on the other hand, the bank makes sure that the party claiming the payment is the correct one. In many countries, vendors must provide banks with the exact name on the partner’s account. In some cases, the partner has to physically go to the bank and sign for the payment; only then will the bank release the funds. With vendors paying hundreds of thousands and even millions of dollars each year to its international partners, the added scrutiny that wire transfers provide can be more than worth their higher price. Beyond the dollar amount, if partner experience is important to your organization, then it is worth your while to do payments the best way possible.

Once you choose your payment method, you need to put systems in place that will enable you to stay on top of constantly changing financial regulations, shifting exchange rates, evolving anti-money-laundering laws, confusing transit codes, and avoidable intermediary bank fees.

In my next blog, I’ll go over some of the issues you should be aware of to successfully manage international partner payments.



Susan Crellin, VP of Finance & Administration at CCI

Susan_8179 web_croppedSusan is responsible for directing all financial, contractual and administrative efforts for CCI, and for all CCI client accounts. Susan brings over 20 years of accounting experience to CCI. Prior to joining to CCI, Susan held financial positions for a variety of companies, including Daikin U.S. (now Sonic Solutions) where she was the Controller for four years. In addition, her credentials include running her own accounting services business. Susan’s mastery of the key financial elements of global channel sales and marketing programs makes her the ideal person for this critical position at CCI.