In today’s globalized economy, businesses need to have reliable and efficient payment solutions to make it easier to do business over national borders. Corporate remittance and traditional payment methods are two of the most common options available. Traditional payment methods are more known to many as they have been used for decades, while the corporate method is a more modern approach that not all businesses are comfortable to do yet. Both options have good and bad points, so businesses should choose the one that works best for them by careful evaluation.
In today’s discussion, we’ll compare and contrast the benefits and drawbacks of each option.
CORPORATE REMITTANCE
The Advantages
Lower costs:
Businesses can save money when they choose corporate fund transfer than the traditional payment method because they will avoid unnecessary fees. The traditional way involves high fees as well as conversion rates. This is great for businesses that make frequent international payments.
Faster processing times:
Doing corporate fund transfers only requires hours, or even minutes, to complete the transaction. This is better compared to traditional options like checks, which can take days or weeks to clear. This is very beneficial if you need to make an urgent payment to your supplier, for example. No need to wait for days just to get your goods or services delivered.
Enhanced security:
When transferring business funds, it’s important to ensure that the transaction is safe. With the corporate, security is ensured as they have advanced measures to avoid fraud, financial misinformation, and unauthorized access. If you’re concerned about the security of your financial transactions, going down the corporate method route is the best thing to do.
Greater transparency:
Corporate fund transfers can be tracked easily as there are real-time tracking features that help businesses monitor their payments and cash flow more efficiently. If you want to track your payments and cash flow in real time, it is possible through this more modern method.
Convenience:
Corporate remittance services can be accessed online or through mobile apps, which makes it easier for businesses to manage their payments and cash flow anywhere, anytime. Business transfer of funds is very convenient because you can access the system online or through a mobile app. By simply turning on your computer or using your phone, you’ll be able to do transfers seamlessly. If you’re a frequent traveler, this would be very beneficial to you as you can manage your payments and cash flow anytime, anywhere.
The Disadvantages
Limited coverage:
Not all countries or regions accept corporate remittances yet. So if your supplier is from that certain region, you’ll have a hard time making that transaction. You might need to use the traditional method in this instance.
Technical issues:
Technical issues are very common when you’re using websites or mobile apps. There will be downtimes, which can result in delays or errors in processing payments. Some websites may crash while you’re using them or become inaccessible. When this happens, you can’t do anything on your side to fix it.
Currency limitations:
Not all currencies are supported. This will be a disadvantage to you if your business operates in multiple currencies.
Dependence on technology:
The corporate method relies heavily on technology. You can access their services through websites or mobile apps. If these are down, you won’t be able to make transactions with them. This is a big disadvantage especially if you need to make urgent transactions. It’s also possible for them to experience cybersecurity breaches. When this happens, your business may be vulnerable too.
Lack of personal touch:
With corporate remittances, there is no personal touch. You won’t be able to do face-to-face interactions. You can’t personalize the service you’re providing to your customers. If you’re a business owner that values personal relationships and personalized customer service, going down the corporate method might not be ideal for you.
TRADITIONAL METHOD
The Advantages
Familiarity:
Traditional payment methods have been around for decades, which means people are more familiar with it. They’re not afraid to use it as their means of making payments. Checks and wire transfers are familiar not only to businesses but also to consumers. Many businesses that are used to using checks might be resistant to change to the new method.
Wide Acceptance:
The conventional payment methods are widely accepted by most vendors and suppliers. They think that it’s the most reliable and conventional option. Many vendors only accept conventional payment methods until now because they find it easier to use.
Security:
The traditional way uses built-in security measures, such as signatures and bank authentication, so security is very tight. Cybersecurity is not an issue when you go the traditional route.
Offline Capability:
Unlike commercial remittances that can only be done online, traditional ways are possible even without an internet. Vendors and suppliers simply need to use cash or checks as payment methods. This is very beneficial for those businesses that are operating in remote areas where internet connection is limited.
Lower Transaction Fees:
Digital methods could be more expensive compared to conventional ones, especially for larger transactions. Businesses that make frequent large transactions are able to save on transaction fees through the conventional way.
The Disadvantages
Slow Processing:
Standard payment methods can take longer to process compared to digital methods, which can cause delays in payment and receipt of funds. This is not ideal if the transaction is urgent.
High Risk of Fraud:
Classic payment methods like checks are often targeted by fraudsters, which can lead to financial losses and potential legal issues.
Limited Record Keeping:
When businesses use checks and cash for their payments, they won’t have detailed records of their transactions. This makes it challenging for their bookkeepers and accountants, especially during audits.
Time consuming:
For businesses that have multiple suppliers or vendors, using classic payment methods can be time consuming since they’d have to write checks or do wire transfers to each of them.
Costly:
Old-fashioned payment methods can be costly, especially if there are international transactions. Wire transfer fees will differ depending on the amount as well as the currency of the receiver. This isn’t ideal for businesses that want to save costs.
In conclusion, both corporate and traditional payment methods have their own advantages and disadvantages for businesses. To come up with the best decision, consider the advantages and disadvantages of each method and pick the one that suits your business the most.
