With global trade at an all time high and competition constantly increasing, it is crucial for every successful business to maximise revenue and save costs where possible. For companies that have international trade, you can make some simple changes to how you collect your cross border revenue and make overseas payments, in order to save a considerable amount of money.
A costly issue regarding overseas trade occurs if you sell via online international marketplaces (such as Amazon, Ebay and Rakuten). If this relates to you, then you are at the mercy of the online marketplace in regards to international exchange rates. For example; If you are based in the UK and sell via Amazon in Europe, Amazon will transfer your European sales revenue to you once a currency margin of 3-5% is subtracted (for the EUR to GBP conversion). This goes for all Amazon’s other jurisdictions as well.
To put this into figures; if you have €100,000 you need to move back to GBP, then this margin is a €3,000 to €5,000 cost each time you do this. Now sadly you won’t be able to erase the entire currency exchange margin, but you should be able to get this down to almost nothing if you’re smart, potentially saving €1,000 – €2,000.
The solution is here in the form of “Free International Collection Accounts”, which are a new offering from currency brokers such as Worldfirst, OFX and Currencies Direct. Businesses can use these free accounts to collect their revenue and move their money from place to place. If you are moving your funds overseas, then banks tend to offer exchange rates to customers at a 3% margin, as well as a fee for each transfer (this can be up to £25). Worldfirst, OFX and Currencies Direct can help reduce this margin to well below that level and perform all your transfers for free.
These are the three best companies that currently offer this service; they have all been established globally in the foreign exchange industry for a long time, are FCA regulated and can offer significant cost savings to clients.
One of the more recent services from the recommended brokers comes in the form of “same currency payments”. This means if you get paid in dollars and need to send dollars to your supplier, you can do this from your dollar receiving account held with the broker (albeit for a small fee). This is something many businesses have been waiting for and will be a welcome addition to the other services currency brokers offer.
Below are the Currency Pal recommendations for the best brokers to use, should you need to make international payments or setup currency collection accounts.
Worldfirst have been in business since 2004. They have offices all over the world including the US, Europe, Hong Kong and Australia. They can offer transfers to almost any destination in the world and have been a trend setter in payment technology since they began.
- Receiving accounts available in Europe, the US, Canada, Australia, Japan, China and the UK.
- Free currency transfers.
- No monthly account fees.
- Superb account management.
- Minimum transfer amount is £1,000.
Platform and mobile app from where payments can be made, transfer can be made between accounts and for other functionality like top ups and account balance viewing.
- Same currency payments available.
- Forward contracts available for up to 3 years.
If you want great customer service and guidance through all your transfers then Worldfirst are the best company for you. They offer webinars and lots of additional information to coach you through the process of transferring money internationally. Visit their website here
WorldFirst are also able to help you open Chinese Yuan (CNY) receiving accounts. They are one of the only companies to offer this service.
OFX are an Australian headquartered company that have expanded rapidly across the world. They are known for having the most competitive exchange rates available to customers and also for offering a 24/7 phone service so you can always speak to a person.
- Receiving accounts available in Europe, the US, Canada, Australia, Hong Kong and the UK.
- Free transfer on any amount over £100.
- Best exchange rates.
- Forward contracts for up to 1 year.
- Same currency payments available
- Local offices in Australia, Canada, the US, UK, New Zealand and Hong Kong.
If you are looking purely for the best exchange rates then OFX are the company for you. They have a very low minimum transfer amount, so if you’re looking to make smaller transfers then they are definitely the company to use. Visit their website here
Currencies Direct have been around since 1996 and were the first company to offer same currency payments for online sellers. They have a great online system and are very helpful when guiding you through transfers.
- 21 branches are located in London, Spain, France, Portugal, USA, South Africa, India and China.
- Currency collection accounts available in GBP, EUR, USD & JPY.
- Free transfers.
- Minimum transfer £100.
- More than 60 currencies available to transfer.
- Same currency payments available.
Currencies Direct are a great all round company. There are fees for their receiving account service, however they can offer transfers to a huge amount of countries where other brokers can’t transfer to. Visit their website here
To conclude; if you make overseas payments and are still using the banks, then make sure you contact one of the brokers mentioned above and discuss your situation with them. They should be able to save you a considerable amount of money with very little admin work. If you sell online internationally then do the same, because if you use a currency broker for receiving accounts, then you will have huge savings instantly delivered.
For those already using a currency broker, are you sure you’re getting the best deal possible? Keeping your currency provider on their toes by having a second provider as an option can only help secure you the best exchange rate possible.
Feel free to get in contact with Currency Pal if you have any questions or are unclear about anything to do with using a currency broker.
*It is also important to note that if you are going to be using any of the Currency Pal recommended companies, they will ask you for supporting documents when you come to open an account with them. This is so that they can confirm your identity and maximise fraud prevention, ultimately ensuring greater safety and security when it comes to your money. See “How it Works?” on our Online Sellers section for further details.