For recruiters who participate in splits with partners in other countries, figuring out international payments can be a hassle. For starters, what currency is being used? The currency for the partner with the job? The partner who supplied the candidate? The client, who is paying the fee? If you’re part of a formal split organization, there may be rules governing currency. For example, in NPAworldwide, members are required to pay their candidate-side partner in that partner’s local currency. The brokerage that is owed to NPAworldwide must be paid in US dollars.
Checks or bank drafts are not generally a good solution for international payments. Often, the recipient’s financial institution won’t accept them. Or if they do, there is an unusually long amount of time required to “clear” the check and release the funds. Similarly, small banks or credit unions (member-owned financial institutions) may not be able to accommodate international payments. Even a large bank may require a special process in order to handle foreign transactions.
So what options remain? Well, credit cards can certainly be an option sometimes. The downside is that the fees can be high and the exchange rate on the currency is often less favorable than what a bank offers. Wire transfers are often a good option but again, there are fees for both the originating party AND the receiving party, in addition to the cost of the currency exchange. On top of that, the instructions are specific, and not universal, so there can be unexpected delays.
Online options also exist. PayPal is perhaps the most well-known. Fees are very low for transactions between “friends” but be VERY careful about doing this for business transactions. You could wind up with a large tax burden if you are using a personal account to make international payments for your business. Xoom is a PayPal-owned company specifically for foreign transactions. It’s fast, with deposits happening within minutes (even after hours or on weekends) for certain banks and currencies, but it’s not intended for commercial use. Veem helps small business make electronic payments both domestically and internationally to more than 100 countries.
If international payments are a regularly-occurring requirement in your business, you may be smart to look at a service like Corpay (they are an NPAworldwide partner). Corpay can help you automate all of your payments, both foreign and domestic. You may even find that currency exchange rates are more favorable than what you can find at your bank.
No matter what solution you choose, make sure you are investigating this EARLY in the payment process. Nothing is more frustrating than unresolved payment issues. It’s bad enough when you’re unsuccessfully trying to make a payment, but it’s even worse when you’re the party waiting to get paid. This can be a huge source of stress and mistrust among split placement partners, so make sure your fee agreement includes payment details. Even though you collect the whole fee from the client, half of it rightfully belongs to your partner and they deserve timely payment.