In this short video, we'll run you through any costs associated with making payments with Paytron.
What are the costs of local payments on Paytron?
The cost of local payments on Paytron are simple to explain. They're free. Whether you're paying by Paytron Direct, or BPAY to an Australian bank account, you'll not be charged any transactional cost by us. This is nothing new. It's probably what you've come to expect from a bank or anyone else.
A nice touch is that these payments will be almost instant if the recipient account is one of the 70 banks and financial institutions linked to the new payments platform, OSKO. There is an extensive list, including all of Australia's big four banks, so chances are that your payments will arrive in a matter of seconds, for free.
What are the costs of international payments?
The cost of international payments needs a little more explaining because the costs are broken into two components: the fee and the margin. Many foreign currency exchange providers aim to mislead you by drawing your attention to their low fees when they have high margins, or their low margins when they have high fees. To know exactly what the deal you are getting is you always need to know both parts of the cost.
As a general principal, Paytron makes money by charging a margin, not fees. When there are fees on Paytron, we are just passing on the network cost of facilitating that payment for you. For example, when you pay via Patron Direct to a foreign country, we are essentially letting you pay like a local, using the country's domestic payment rails. These payments are incredibly fast, usually arriving at the reciprocate bank on the same business day, or at worst, the next business day. It's not free for us to give our customers this access, so we pass on the cost in the form of a flat fee of $2 AUD denominated in whatever currency you are using to fund the payment.
When you pay via the SWIFT Network, there is generally a much higher cost, usually $10 or more. It is important for us to know that none of this fee goes to Paytron. It is simply a cost of using the SWIFT network, which we pass onto our customers. Although it is more expensive than Paytron Direct, it's still an incredible network that connects many of the economies that are generally harder to reach, and the payments are still fast taking between 1-3 business days.
Now let's loop back to the second part of the cost. The margin is a word that has different meanings in different contexts, but it's easiest to understand in foreign currency exchange. With a simple example, when a big financial institution with deep market access, like the banks, want to exchange one currency for another, they do it at the absolute best conversion rate anyone can get, which is called the interbank rate. When these institution or other services build on top of them, exchange currencies for other people, they usually charge their customers for the service by giving them a slightly more expensive rate and pocketing the difference. This difference is called “margin”, or sometimes “spread”. Currently uninformed individuals and small to medium businesses can end up paying as much as a 5% margin if they deal with certain foreign exchange markers. Paytron charges just 0.5%, which can represent a savings of up to 90%.
We also charge the same margin for every country we support. While many others will give you a great rate if you pay to major economies like Europe or the US, but hike them up everywhere else. If you want to calculate potential savings, check out the slider on the pricings page on our website. Of course, not every foreign payment on Paytron has to include a conversion. Since you can hold and receive foreign currencies in your Global Accounts, it is perfectly possible to make a foreign currency payment using your existing balance in that currency.