What to Consider When Doing Business in Multiple Currencies
International expansion is becoming increasingly common for small and medium businesses. The benefits of increasing your customer base, extending outside of local competition and building a global brand are very appealing. And with e-commerce booming, many businesses are finding an easier entry into international markets through platforms like Amazon and eBay.
Of course, any global expansion comes with new and unique considerations. One such consideration is how best to manage multiple currencies once global revenue and invoices start flowing in. It’s important to choose a financial service provider that can help you navigate the complexities of dealing cross-currency, understand and prepare for market volatility, and manage overseas staff and supplier payments effectively.
Looking for a global money transfer provider
The marketplace for currency exchange is becoming increasingly competitive. From banks, to new and established disruptors. It begs the question, what should a business be looking for in a strong and stable partner in international payments? While the big banks have always been a go-to, many alternatives can also offer what the banks do—a strong history, banking relationships, high security standards and regulation—as well as additional features like competitive rates and risk management tools. It’s these additional features that can shift the focus away from the banks when businesses are looking for an international money provider.
What to look for in an alternative to the banks
When it comes to finding a currency exchange provider, there are bank alternatives that are established, stable and secure. OFX is one, with 20 years experience in international payments, but others are also emerging. So what should you consider when exploring options?
- International reach with a local feel
When it comes to getting the best rate, it helps to choose a partner that has relationships with established financial institutions globally. The right provider should have multiple partner banks and be able to send funds directly between these bank accounts quickly and securely, rather than using an expensive network of external banks. OFX, for example, has 16 partner banks, holding over 150 bank accounts across 55 currencies.
And it’s not just Global by Local banking systems you want to look for, it’s also important your provider is glocal too. OFX has international offices across the English-speaking world, along with a 24/7 customer service desk available to help with any questions or concerns. That is key when you’re dealing with your hard-earned money.
- Understanding that risk management and global expansion go hand-in-hand
As a business you will want to keep cash flow predictable. This is harder once you become exposed to international market instability and currency fluctuations. Swings caused by the ongoing trade wars, Brexit and other political events cannot be prevented but there are ways you can prepare and better protect your bottom line. Two ways to do this are with Forward Contracts and Limit Orders, so check if these are offered when looking for a provider.
A Forward Contract allows a customer to lock in an exchange rate for future payables. If you feel a negative currency swing could be on the horizon but aren’t quite ready to make a transfer, you can put your mind at rest by locking a sum at today’s rate and then transfer that amount at any future point for up to 12 months.
Similarly, if you anticipate that the market could shift in your favor, Limit Orders allow you to set a target rate, and if it’s reached, a currency specialist will contact you via email or phone to complete the transfer at that rate. You may even want to roll that rate into a Forward Contract to use it again in the future.Tools for ecommerce success
- Tools for eCommerce success
As an emerging market, there are few players who understand the unique challenges faced by online sellers. Risk management tools are helpful, but tailored solutions can completely shift the dial. That’s why OFX created the Global Currency Account, which essentially gives online sellers the equivalent of a local bank account in the US, Canada, UK, Europe, Australia and Hong Kong. With a Global Currency Account, a seller can collect local revenue from various global marketplaces, switch between currencies with ease, and even pay international suppliers from any balances they hold internationally. All at great exchange rates.
- The trust factor
The nature of dealing with money means that trust really must underpin every aspect of financial services, be that banking or currency exchange. So it makes sense that some people revert to their banks for managing their global money. However, the financial services industry is a heavily regulated one, which means that players in that market need to abide by a strict set of rules. Look for a provider listed publicly and regulated in all the jurisdictions in which they operate. OFX are ASX listed, hold 55 global licences, and are audited regularly by their 16 partner banks. Along with this, ensure they have skilled fraud and compliance teams that can help ensure your money remains in safe hands.
While there are things to think about when looking for a global money transfer provider, the cost saving benefits of working with a specialist are very worth the investigation.
OFX is the global money transfer specialist that empowers individuals and businesses to move money with confidence. We make the complex world of currency exchange simple with our easy online platform and 24/7 customer support model. Wherever you are in the world, OFX can help. To learn more about OFX or register for preferential rates, visit OFX.com.
KEEP UP WITH THE LATEST
Get the best tips, stats, and resources on the shipping and logistics industry, delivered straight to your inbox.
Get Started Today
Plus savings programs in parcel discounts, lost/damaged claims, shipping insurance, freight shipping, imports, and more!