Business money transfers
Regardless of the size of your business you may find yourself in a position where you need to make an international money transfer, be it a one-off occasion or on a regular basis. Reasons for making a business money transfer include; purchasing goods and services for your business overseas or paying royalties and wages.
So when sending money overseas for business purposes try and avoid the banks and find a foreign exchange specialist that suits your transfer needs. Shop around and compare international money transfer deals to save yourself time and more importantly money for your business. A provider will also limit your exposure to currency fluctuations, ensuring that your company will improve its profit margins.
Options for making business money transfers
When it comes to sending money overseas for business purposes there are two main options you can choose from; a bank or a foreign exchange specialist. As we mentioned above, you can save your business hundreds if not thousands of dollars by choosing a specialist provider over a high end bank. A bank has high overhead costs and hefty fees. A FX specialist will send your money safely, securely and cheaply.Here are a list of pros and cons for each option to help you make an informed decision when sending money abroad. Compare the market and save right here!
Foreign Exchange Specialist
- They offer the best value for money with access to competitive exchange rates
- Experienced market professionals will provide you with all the information you need to manage your company’s foreign exchange more cost effectively
- Fees are a lot more modest compared to the banks and some providers might even waive them if you meet particular requirements
- Plenty of transaction options including forward contracts and market orders
- Some providers have a minimum and maximum transfer limit which may not work in your businesses favour
- Technical problems could arise and slow down the transfer process
- If you need to send money overseas in a hurry the company’s bank can be a good option
- For a one off small amount a bank can be convenient and reliable
- The bank’s exchange rate is often a lot more expensive than a foreign exchange provider
- Banks usually charge high conversion fees as well as a sending and receiving fee
- The bank’s rates may ‘change without notice’ so you may not end up with the red hot rate you expected
James has expanded his software development business to Japan and has employed 250 staff. As a small business owner he wants to do everything in his control to save money and increase the company’s profit margins. Currently he’s deciding whether it’s more viable to use an Australian bank to transfer the monthly staff wages or to open an account with a foreign exchange specialist. To get the best value for his Australian dollars James compared the differences between a bank and a foreign exchange provider.
|Bank||Foreign Exchange Provider|
1 AUD buys ¥79.4000 JPY
1 AUD buys ¥84.3167 JPY
Amount received for AUD$10,000
In person $30, online $22
As you can see from the table above, James will save time and money for his business by transferring the staff wages with a foreign exchange specialist.
Make sure you compare the day’s best exchange rates right here!
Features to look for when choosing a foreign exchange specialist for your business
As a business owner we’re confident to assume that you’re always looking at methods to be more efficient and ways to save and make money!? So when you’re shopping around for a foreign exchange provider make sure you consider the following features. Each feature can make a huge difference in how much and how quickly your recipient will receive their money and subsequently that will result in more cash in your company’s pocket.
- Exchange rate: First and foremost take a look at the exchange rate the provider is offering. Take the time to compare and calculate how much you’ll receive for your Australian dollars. A few cents difference in the exchange rate could save your business thousands of dollars. Remember, the higher the exchange rate, the more money you will get! Make sure you compare quotes with Mozo.
- Fees: There are several fees associated with making an international business money transfer. But if you do your research a few foreign exchange specialists waive these charges if you meet a certain criteria. Fees to be wary of include: a transfer fee, a sending and receiving fee, a cancellation fee and an amending fee
- Transfer methods: In this day and age there are plenty of methods for transferring money overseas these include; online, on the phone, in person or even via an app
- Turnaround time: This is the time it takes from the moment your transaction has been processed to the time your recipient receives it. Gone are the days of waiting weeks to get a transaction cleared, these days the transfer speed can range from 1 to 5 days. If you need to send it quickly, talk with your provider and see if they can speed up the process but it may cost you. Some providers allow you to track the transaction online
- Transfer limits: A lot of providers have a minimum and maximum amount you can transfer
- Pickup methods: The usual method is by electronic funds transfer but some services allow the recipient to pick up cash from a branch.
How to set up international business money transfers
So you’ve found a provider that suits your business transfer needs; now it’s time to set up the account and send the money abroad! Regardless of which foreign exchange specialist you have decided to use the method is pretty much the same. Here’s how it works:
- Register and set up an account with a foreign exchange provider
- Decide how much you want to transfer and to which country you need the money sent
- Confirm and make sure you are happy with the costs and exchange rate of the transfer
- Provide details of the recipient including their name and bank details
- Book the deal!
Q1. What’s the best option for making a small one off international business money transfer?
PayPal is a safe, trusted and affordable method for sending small one off transfers. The transfer is can be done electronically, only takes a couple of minutes but both you and the recipient will need a PayPal account. For convenience, you can also use your local bank but the exchange rate will be pretty poor and as we mentioned above their fees and charges are pretty large.
Q2. I need to send money to Thailand on a regular basis to purchase goods for my business what type of provider should I choose?
To save yourself time and more importantly money, a foreign exchange specialist such as OzForex, World First and CurrencyFair is definitely your best option.
Q3. What is a spot deal?
This refers to an arrangement where you lock in the current exchange rate immediately with a legal binding of converting one currency for the other within 24 hours of booking the deal.
Q4. What is a limit order?
A limit order lets you set the exchange rate that you would like your money transfer to happen in. The provider will lock in the deal for you when the rate hits your goal.
Q5. What do SWIFT and BIC stand for?
The Society for Worldwide Interbank Financial Telecommunications (SWIFT) or a Bank Identifier Code (BIC) is an 8 or 11 digit code that identifies banks around the world. This code is used to transfer money between banks via international wire transfers.
Q6. How does a forward contract work?
A forward contract allows you to lock in an exchange rate today for a transfer that needs to occur in the future (between two days and twelve months from today), thereby protecting you against exchange rate movements.
Q7. Can I track my international business money transfer to Germany?
Yes, you can check the status of your money transfer by checking in with your provider online or by phoning them.
Q8. What happens if I need to cancel my transfer?
As long as the recipient has not yet received the funds, you should be able to cancel the transfer but it may come as a charge. Check with your provider.