Transferring funds online

When involved in international trade it makes sense to make and receive payments by the method most suited to the business's needs. This will almost certainly involve using the internet, but this does involve some risks of which it is important to be aware.

Online banking: power but also responsibility

International online banking systems are very powerful – they give businesses the ability to move funds from one account to another safely, efficiently and rapidly. When a bank receives instructions from a customer through an authorised electronic channel it will normally process them automatically, which makes it essential to be security-conscious with regard to online banking credentials.

These credentials are often the target of phishing scams, which are attempts by criminals to 'fish' for the security information used to access online banking systems. Therefore it is advisable to be suspicious of any emails requesting banking information, such as the security credentials used for logging in to bank accounts. HSBC and most other banks will not send emails asking for confirmation of security details, so it is advisable to delete these emails without opening them or any attachments and report them to the bank.

Employee fraud

Unfortunately, businesses also experience fraud and crime from employees, so there is a need to apply the same precautions to the transfer of international funds as to domestic transfers.

The right governance and segregation of duties are essential to ensure that no one employee has the power to transfer funds. Therefore rigorous policing of guidelines on who handles payments for what types of transaction can be a valuable means of mitigating risk, as can daily review of the audit trail.

Global payments

Making and receiving international payments will be unfamiliar territory for businesses trading overseas for the first time. Depending on the kind of account they hold and the size of the payment, businesses may find their existing bank is able to process their international payments without difficulty. Payments can be made in multiple currencies via various payment mechanisms and the bank should be able to advise on the best method for the circumstances.

However, overseas payment mechanisms can have very different timings and costs from domestic ones. Again the bank should be able to advise on these. If regular overseas transactions are likely, it may be worth opening accounts with an international bank in the relevant countries so payments can be routed as domestic payments via the local clearing systems. Depending upon transaction volume and standing charges, this may be less expensive and faster than making cross border payments.

Conclusion

• Online banking is a powerful and efficient way of making international payments, but good security procedures are essential to minimise the risk of external fraud caused by theft of security credentials.
• The same applies to employee fraud: robust procedures, such as distributing the payment process across several employees, are essential.
• International payments often involve unfamiliar systems and procedures. Most banks should be able to provide guidance on the appropriate methods and requirements.

Speak to HSBC for further information and guidance on making international payments.