Globalisation has brought tremendous changes in the business world. Businesses are moving overseas from the local markets, enabling huge cultural and monetary exchanges. Just like any other entrepreneur, you might also be aiming to expand your business across the borders. There isn’t any doubt that international trading can take your business to new horizons, help you reach more customers and increase sales.
But one of the major reasons why small businesses avoid international trade is the alarmingly high costs involved in international payments. To name a few, service charges, exchange rates and transaction fee are some of the factors that affect international transactions.
As a result, many business owners, unable to find the right solution, decide to stick to domestic business deals only. But what if we say that you do not have to sit back in despair? Here we bring you some effective tips on how you can avoid paying the high fees for international payments and begin your journey of success without any hustle.
A multi-currency account is an account with which business owners can manage more than one (up to 10) currencies in a single account. With such an account you can manage all your international finances in one place. These type of accounts offer low exchange rates and can help you to process international payments in a much safer and faster way. A multi-currency account is the best option when you are planning to deal with two or more countries.
It is an online account that can be used to send money internationally. You can also accept payments through this account. You can open this account for free. You can sign up as an individual or a business for this account. The person to whom you intend to send money does not require to have a TransferWise account to receive it. Started in 2011, TransferWise has helped millions of people in sending money to a foreign country. TransferWire, unlike banks, uses the exchange rates of the market without any additional costs.
For those who are not familiar with this term can consider hedging as insuring their international transactions. In other words, you need to sign some contracts with the international company with which you are carrying the business to save your transactions from any kind of risks like unintended changes in the exchange rates. Hedging might not completely remove the risks but will reduce the impacts to a certain extent. However, one must have the right knowledge otherwise hedging can be a complicated business.
International Wire Transfers
By wire transfer, we mean transferring money via electronic means. International wire transfers mean sending money internationally via electronic medium. These transfers are considered completely safe however they might not help you save money to a great extent. International wire transfers are done via SWIFT (Society for Worldwide Interbank Financial Telecommunication) route. SWIFT is an organization that enables fast and secure money transfers internationally.
Hire a Currency Specialist
A currency specialist can help you save money to a great extent. Many times small business owners have no idea about dealing in different currencies. At such a time, a currency specialist can guide them in a perfect manner. A currency specialist is just a consultancy that provides a means of transferring money and legal advice to save some. Their advice can help you in every case whether you are exchanging money, providing the salaries or making payments.
Most of the people who have done some international transactions have used PayPal. It is an online payment solution. It is convenient to use, quick and easy to manage. You do not even need to know the bank account details of the receiver. All they need is a PayPal account and you are good to send them money. However, you will be required to pay some business account fee, The receiver must have a receiver type account.
Small business owners can also partner with consultancies abroad who will handle the payments for them. In this way, you can be saved from the high exchange rates of the banks. We recommend you to use these third parties only when you have a list of tasks to accomplish overseas. For instance, paying salaries, making payments to international suppliers, paying to overseas contractors, vendors and delivery companies.
8Automate the Process
You might have heard that batch processing reduces the cost of a project. That is instead of doing the same type of task every day you can save that task for the last and do it all together at the end of the week. This is what automation has to do. Create a billing cycle and release all the payments at once. Bulk transactions will help you save money. Chose an automated platform to carry your transactions to save more!
These were some of the legitimate ways to save money while making international payments. Do not stick to one method. Keep exploring no matter what. Only then you will be able to find out which method saves you more money.
Before picking up a new service, do some calculations and see how that service will be beneficial for you. If the deal seems fruitful go for it otherwise you can always stick to what you are doing. Share your thoughts about saving money on international payments. Which method do you think is the best?