I am selling a Software as a Service product worldwide and have just secured my first clients in the USA. The monthly rate is in hundreds of dollars, and at present companies are paying per month rather than a full year in advance, so frequent small transactions.
What would be the best way for them to send these payments over to the UK?
At present I am assuming I will have reasonable oversight over each new client for the next 6 months to a year, so it doesn’t matter if it is necessary to spend some time setting up an account/payment method for each client.
You don’t specify what size of businesses your clients are, but from my own past experience of billing small amounts to US companies I find that many companies are happy to make payments by credit card, and willing to forward their card details to allow you to collect payments. Would this work for you?
Opening and running a simple USD bank account with your bank, and asking your clients to make wire transfer payments into the account, may be the easiest method.
This way, you can wait until you have more than £20,000 of USD in the account, and then transfer the USD to GBP (at this level, you can expect a decent exchange rate from your bank – if they don’t offer then fight for one).
Some of the UK banks offer a drop-box account in the USA for receiving payments from the USA – this simplifies payment for your customers, as they only have to make local wire transfers rather than international ones. Check the pricing though.
As Mike Josypenko said, credit card is another solution (but watch our for chargeback bad debts).
I run a small translation company, and we have clients in the US. At our current turnover its not worth the expense of an account in USD, we therefore accept payment either by cheque, (which is a pain as they take a while to receive and cost a bit in bank charges), or by PayPal. Personally I love PayPal for small transactions, your customer can then pay by credit or debit card, and its easy to accept payments in different currencies. They charge a percentage (typically around 2.5%, but it varies), so you need to factor this in as an additional cost. It takes a bit of effort to set up a PayPal business account, but its then easy to use. We’ve also used Moneybookers, which I’ve found to be a pain, its so hard to make changes to an account, and you can only have the account in a single currency. Nowhere near the flexibility of PayPal. There are other alternatives like Worldpay, but I don’t have experience of them.
Hope this helps.