Set Up International Payment Processing for the US
There are important points you must consider when setting up international payment processing.
Before you can generate international payments, do the following.
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Verify that the International ACH Transaction (IAT) standards apply to your transactions.
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Create an international organization payment method, and attach it to a payroll.
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Ensure that a primary mailing foreign address exists for the payee.
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Create an international personal payment method for the payee.
You can use the Batch Loader process to add a personal payment method and provide country-specific bank account details for them
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Consider how the foreign exchange type may impact currency conversions during the transactions.
For further info, see the following sections.
Do These Standards Apply to Your Transactions
IAT is the Standard Entry Class (SEC) code for the US Automated Clearing House (ACH) network. Employers use the ACH network for electronic payments and transactions.
Use IAT for any transaction involving a financial institution located outside the territorial jurisdiction of the United States. The US may be involved in the processing or settlement of the transaction.
Any ACH transactions you want to perform must use the IAT SEC code in these instances.
For example, these standards apply if your organization is any of the following.
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Non-US headquartered company with US operations
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US company with pensioners or employees located outside of the US who could potentially have funds forwarded to a non-US financial institution
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Third-party sender or payment aggregator
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US company with suppliers located outside the US
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US company receiving ACH credit entries from offshore entities
Create an Organization Payment Method
Use the Create Organization Payment Method task to define an organization payment method (OPM) for international transactions.
This OPM must have the following settings.
Field name |
How you use it |
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Payment Type |
Select International Transfer. |
Bank Reference Type |
Identify the immediate destination identification. |
Bank Name |
Identify the immediate destination name. |
Company Reference |
Identify the immediate originator name. |
Payment Reference |
Enter the value to appear as the Reference Code in the IAT file's header record. |
Report Category |
Select Standard International EFT to identify this payment method as being a foreign transaction. |
Confirm the Primary Mailing for the Employee
For a payee to receive payments through the IAT process, they must have a foreign Primary address. The address must include the city, state or province, country, and postal code. The country of this address must be outside the United States.
Set this address through the Person task.
Create a Personal Payment Method
Use the Personal Payment Methods task to define a personal payment method (PPM) for your international transactions.
This PPM must have the following settings.
Field name |
How you use it |
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Bank Name |
Specify the name of the receiving Depository Financial Institution to be used in the Fifth Addenda Record. |
Bank Account Number |
Specify the receiver's bank account number. |
Routing Transit Number |
Identify the bank identification number of the Depository Financial Institution maintaining the receiver's account. This can be:
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SWIFT |
For countries that use Society for Worldwide Interbank Financial Telecommunications (SWIFT), identify the bank identification number of the Depository Financial Institution maintaining the receiver's account. To determine the appropriate SWIFT or BIC codes for an employee's account:
|
IBAN |
For countries that use an International Bank Account Number (IBAN), identify the bank identification number of the Depository Financial Institution maintaining the receiver's account. To determine the appropriate IBAN codes for an employee's account
|
Foreign Payment |
Describe the origin of the entry, so it can be displayed to the employer. |
Country |
Specify the receiver's bank branch location's country code. |
The fields you see depend on the country chosen in the person's primary address.
By default, all employees inherit the payroll definition's OPM. To override the default when setting up an international employee, you must create an international PPM and select an international OPM.
Consider How the Foreign Exchange Type May Impact Currency Conversions
Use the Fixed-to-Fixed foreign exchange type to calculate values for international transactions.
In the Fixed-to-Fixed exchange type, both the input and output amounts are calculated in US dollars. Currency conversion doesn't occur as part of this exchange type.
For example, your company has an employee abroad, and you pay a monthly stipend of $1000. The amount is to be deposited to the employee's foreign bank account in USD. Your company originates each ACH transaction for $1000 from the employer bank account in USD. Then your company requests the bank to transfer the amount to the foreign bank account. The banker deposits $1000 in the employee bank account.