How to make receiving international bank cheques easier for your recipients

Despite incredible progress and developments in financial services over the years, clearing an international cheque still involves many problems. For several reasons, making international cash payments via cheque is a complex experience for both you and customers. Here’s a deep dive into the challenges and how to overcome them.

Cashing out a foreign bank cheque is a time-consuming experience

It can take around 14-20 days to receive an international bank cheque in the post depending on the originating and destination country. If the cheque doesn’t arrive at the destination and is cancelled, the beneficiary customer will need to wait even longer to receive a new cheque by post. Once the cheque is finally received and deposited, it can take an extra  4-7 weeks until it is cleared by your beneficiary’s local bank.

Without a better alternative, companies making pension, insurance, and other types of cross-border cash payouts may struggle to provide a good customer experience. From your beneficiary’s perspective, this time-consuming process makes access to their funds unreliable and the whole experience quite burdensome. In a time when fintech companies are challenging legacy banking systems, providing an optimal customer experience should continue to be a high priority, even when cheques are involved.

International cheques have high bank deductions and exchange rate fees

The high cost is another downside of international bank cheque payment transactions. The deposit fees depend on the country of origin and destination, and the clearing method – by collection or negotiation. By negotiation, your beneficiaries’ bank will credit their account before they receive the funds, and by collection, the bank will only credit the beneficiary’s account after the money has been received from the issuing bank. Cheques cleared by negotiation are faster and cheaper than by collection, but if the cheque is returned unpaid, an extra fee will be charged, making the payment more costly.

For example, in Switzerland, if your beneficiary has a Credit Suisse account and deposits an international cheque, it’ll cost 20 Swiss Franc (EUR 18) in deposit fee and an extra 2.5% fee on the first CHF 1,000 (EUR 910) and 1% of the extra amount beyond that. If your beneficiaries receive a cheque for EUR 900, they’ll pay EUR 41 in fees, plus the foreign exchange rate commission. The foreign exchange rate can be rather unfavourable for your customers as foreign banks crediting the cheque typically make a profit on the margin by offering a much worse exchange rate than in the open market. Considering all these charges, the final payment to your customers will be substantially reduced.

Improve your customers’ international payments experience

Banks and other financial institutions should be looking to improve their customers’ satisfaction by providing an alternative to international cheque payments. The best option available to make international payments in cash is by using a payment service provider (PSP) that is connected to the local network in your payout countries, with a high number of payout locations that also reach rural and remote areas.

However, if you want to expand your reach to unbanked and underbanked customers living in rural areas, it is not ideal to use a PSP with pick-up locations that are mostly concentrated in limited areas within a country. Some well-known PSPs have most of their cash pick-up stations located in large cities and surroundings, excluding people living in rural areas.

Replace slow and expensive international cheques with PostalCheque

Meet your current customer needs with Inpay’s PostalCheque. This solution gives you access to the known and trusted postal office organisations in 28 payout countries. Via a single agreement and integration, Postal Cheque connects you to a worldwide network of 87,000 postal outlets, enabling you to leverage the most customer-friendly and easily accessible locations for beneficiaries to collect cash payouts.

PostalCheque makes international cash payments faster and more convenient than bank cheques. Your payments are sent closer to your customers’ residence within 1-2 business days. What’s more, the identity of the recipient is verified at the point of payment collection through a fully secure and fool-proof KYC method that deters fraud.

With PostalCheque you can make mass cash payments at a low cost without paying excessive banking charges and FX fees. A flat fee per transaction will be pre-agreed with our sales team depending on payment volumes and amounts. No fees will be deducted from the payout at the destination and FX conversion is performed by the postal operator. The beneficiary receives the payment in full, in the local currency.