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Paying your developers on time and with low fees is important to keeping them happy. Here's a list of some of the options for paying developers internationally:
Payoneer is a payment platform that allows you to pay in several different currencies in as little as 2 hours, making it one of the fastest payment solutions. Payoneer charges a flat $3 fee on transfers, plus a margin on mid-market currency exchange rates. It's the best solution for transferring smaller sums, but for larger amounts the rates can get quite high.
WU Edge is a payment platform by Western Union. You don't have to pay an upfront fee for transfers to many countries, but they add a margin on the mid-market currency exchange rate. One downside to using WU Edge is that you have to go through quite a length application process to use their service.
TransferWise is a payment platform that allows you to pay using many different options, depending on the country you are paying. For paying India, you can choose anything between ACH (bank debit), credit card, Apple Pay, or wire transfer. The big benefit of TransferWise is that they don't add a margin on the mid-market currency exchange rate.
Xoom is a payment platform by PayPal that advertises quick transfers, sometimes as fast as minutes. However, their rates and fees tend to be much higher than those of TransferWise, but it allows your recipients to be paid in cash, if that's a request of theirs.
Wire transfers are generally conducted through your bank. Wire transfers usually have a high fee (for example, Bank of America’s fee is $45 per wire), can take many days to arrive, and can be a hassle to send. We try to avoid using wire transfer when we can, but it's our last resort for payment when nothing else is viable.
Paying your international development team with a credit card is doable, but not advisable. Not only will the fees be extremely high, you'll also be limited in how much you can send per transaction depending on your card limits. We generally don't recommend using credit card to pay your developers, even as a last resort.
With our clients, we use Aloa Pay, a custom-developed payment platform that presents a clean and easy-to-digest interface for our clients to send payments. We act as an escrow between our clients and our development partners, so all payments from clients go to us directly, greatly simplifying the process since we have a US bank.
Clients don't have to think about currency conversions or variable fees, they just pay us as they would any other vendor. We then handle the payment to the development partner, so the client doesn't have to worry about different international payment methods.
Another factor to consider with payments is legal and tax implications. A benefit to having us act as escrow is the client only has to sign and pay with us, a US company. We handle the contracts and payments with the development partner, so clients don't have to worry about international contracts and tax forms like the W-8 BEN-E.
Whichever payment solution you choose to use, make sure you create a payment plan and follow it consistently. Your development partner is working hard to deliver your product, and timely payments does wonders for the relationship.
If you need help planning a payment plan, refer back to Defining your Timeline, Milestones, and Technology Stack or reach out us via live chat or email resources@aloa.co! We'd be happy to help however we can.
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