Best online banking for sole trader sending/receiving international payments?

Aliforce

I've been self-publishing books via Amazon KDP as a hobby for just over a year and have reached the point where I need to be thinking about registering as a sole trader and moving my banking over to a business banking account. Last year my turnover fell under HMRC's £1k tax-free trading allowance, but turnover is growing and I'm hoping to use it to supplement my pension when I retire in a few years. 

My question is, has anyone had good/bad/indifferent experiences of online business baking that is geared towards sending and receiving international payments? A lot of them just seem to cater for Euro but Amazon obviously trades worldwide and the majority of my current transactions are in US dollars. Currently looking at Starling. I've searched elsewhere on the forum but can't find a thread to answer. Thanks!

penners324

Starling is your best bet

DullGreyGuy

Do you need to use a bank account for it? Personally use Wise for receiving funds. Sending can be Starling or Wise depending on if paying by card or transfer.

Aliforce

Thanks for the replies. I’ll look more closely at both of these and at some point I’ll have to speak to an accountant to talk things through. Grateful for the feedback. 

LessImpecunious

We've recently started to use Wise - no problem with sending money, once you've worked out how the (fairly simple) system works; but the main problem we've found with receiving is customers' unfamiliarity with the system (retail customers - if B2B presumably should be easier!). We initially tried charging them in £s to ensure we received the same as from a UK buyer, which in theory they could do simply and fee-free by using or opening their own Wise account, but (perhaps understandably) they would usually chose the alternative option Wise offered which was to use Swift - which meant that they ended up paying exchange and transfer fees as if they'd used any old bank... and sometimes they chose shared fees which meant we ended up with fewer £s than we should have... So we're now trying charging them in their own currency, which means we have to make a guess at what they owe (which of course will vary from day to day). Only tried with one customer so far, in the US, who was confused by the fact that she was paying to a bank account there rather than in the UK (which is how the system works)...so clearing that up resulted in extra delay and movement of the exchange rate...We'll probably include some explanation of the system with our payment request next time!

DullGreyGuy

You can have a USD wallet with Wise which will have a routing and account number like any other US bank account. The person can then wire the money to the account like any other US bank account. You then choose when you convert it from USD to GBP and extract the money. 

As is often the case in the US, there is a wire fee to receive monies but you just build that into your costs as long as you are invoicing a reasonable amount per client. More comfortably fits into normal processes than trying to get a corporate client sign up for a Wise account etc.

LessImpecunious

Oop yes, I'd forgotten that we can hang onto the dollars until there's a favourable exchange rate (and there is a fee, just less than the usual...). But our customer still hasn't made the transaction yet, despite us explaining that it was OK to pay into a US bank...Might have been easier just using Paypal

DullGreyGuy

LessImpecunious said:

Oop yes, I'd forgotten that we can hang onto the dollars until there's a favourable exchange rate (and there is a fee, just less than the usual...). But our customer still hasn't made the transaction yet, despite us explaining that it was OK to pay into a US bank...Might have been easier just using Paypal

Hanging onto the dollars can help you mitigate FX risk to some degree but Wise isnt a bank and as such there is no FSCS protection if they went bust so you are really just exchanging FX risk with counterparty risk. 

The OP however seems to be selling overseas and probably is therefore selling in local currency so the FX risk is built into their model... its different to if you are billing your client £10,000 but allowing them to settle in USD.

The secret with the US, who tend to have a very insular view, is simply "give them your US bank account details to wire the money". Dont bother explaining to them that its not really your account and that its going into a digital wallet etc as it adds unnecessary confusion to them.

Aliforce

DullGreyGuy said:

Hanging onto the dollars can help you mitigate FX risk to some degree but Wise isnt a bank and as such there is no FSCS protection if they went bust so you are really just exchanging FX risk with counterparty risk. 

The OP however seems to be selling overseas and probably is therefore selling in local currency so the FX risk is built into their model... its different to if you are billing your client £10,000 but allowing them to settle in USD.

The secret with the US, who tend to have a very insular view, is simply "give them your US bank account details to wire the money". Dont bother explaining to them that its not really your account and that its going into a digital wallet etc as it adds unnecessary confusion to them.

Thanks - Yes, the lack of FSCS protection is a worry to a risk averse person like me. Not that I’m expecting to earn mega bucks but I’d still like peace of mind. I’m veering towards Starling for that reason alone. As my main royalty source is currently via Amazon, and they are not known for flexibility with their seller terms and conditions, I think opting for a simpler banking model is best. 

LessImpecunious

Yes, sorry, didn't read the OP very closely, just the title - a different situation to ours where we are selling from our own website in the UK and sending abroad... Any FX or counterparty risk (not exactly sure what that is but think I get the idea), or bank fees, will be as nothing compared to the sums going "down the river" . A good reminder not to leave our nothing-like-£10,000 hanging around and get sucked into watching the pound/ dollar rate (it was quite addictive when waiting for the best moment to do a transfer in the opposite direction!) and playing the markets for a few pounds while risking Wise going bust

Aliforce

LessImpecunious said:

Yes, sorry, didn't read the OP very closely, just the title - a different situation to ours where we are selling from our own website in the UK and sending abroad... Any FX or counterparty risk (not exactly sure what that is but think I get the idea), or bank fees, will be as nothing compared to the sums going "down the river" . A good reminder not to leave our nothing-like-£10,000 hanging around and get sucked into watching the pound/ dollar rate (it was quite addictive when waiting for the best moment to do a transfer in the opposite direction!) and playing the markets for a few pounds while risking Wise going bust

No need to apologise, it’s all good information - trying to squeeze the last bit of value out of cash is becoming a hobby for everyone!
Next job is to renew my passport so I can open an account. And get a passport photo that doesn’t make me look like a serial killer