A Business's Guide To Sending & Receiving Payments In Foreign Currencies

Sending and receiving money to and from abroad has become more accessible than ever. There are many options available for sending and receiving money from abroad. A bank transfer is one of the most prominent and convenient ways to send and receive money. However, using a bank to transact money in foreign currencies is often a long and expensive way of transferring money. Here is a quick guide with the things to consider before sending or receiving money in foreign currencies.

1. Open A Multi-Currency Account

A multi currency account enables your business to send, receive and hold funds in one or more currencies. This differs from a one-currency account which often requires changing the money to or from the account's local currency.

However, a multi-currency account doesn't send and receive money in every currency available. The bank you work with will determine which currencies you'll use in your account. A multi-currency account helps you save effort, time, and money for your business to transact in numerous currencies.

The ability to minimize foreign exchange fees is one reason most people prefer to have a multi-currency account. In one currency account, the money you send or receive in foreign currencies will always contribute to the exchange fee. This fee can tally up fast and amount to substantial expenses, especially if you send and receive money in one or more currencies.

Having a multi-currency account also allows you to hold money in foreign currency. It won't be necessary to convert it at all times, although you can decide to do so at your convenience.

2. Monitor The Exchange Rates

Exchange rates often rise and fall, meaning that the amount your business will send or receive can differ from one week or month to another. Your money transfer provider will cause the difference in the exchange rate margins.

Therefore, you must know that you are susceptible to exchange rate risk while making international transactions. Exchange rate risk refers to the likelihood of gaining or losing money due to changes in the foreign exchange. Whether you're a big business that transacts large amounts of money with global partners or a small business that relies on constant cash flow, your transaction rates will always impact your business. 

The service provider will often inform you about the transfer charge while sending or receiving money from overseas, yet the rate of exchange margin may have more hidden add-ons. However, the great news is that you can decrease your business exposure to exchange risk through various currency equivocation alternatives offered by many cash transfer companies.

3. Choose The Right Service Provider

International money transfer companies are acknowledged for being among one of the quickest and most cost-friendly ways to send and receive money overseas. Another reason is that many money transfer service providers enable you to send and receive money in various ways. Instead of being restricted by bank transfers, you can make international payments through other methods like mobile transfers or online wallets.

The methods you'll use will vary based on the service provider you select because not all companies offer all the options. Thus, ensure that your chosen service provider offers your preferred payment method. These methods also tend to have reduced exchange rate fees, especially if you're sending money.

4. Consider The Speed

Factors like location or the money transfer company you're partnering with often affect how quickly you can send money online and receive it. Sluggish international money transfers can result in significant problems in running your business, especially if you're trying to order items and the supplier will only deliver once they receive the payment. As a result, you'll likely lack the items in stock when you need them most and damage the reputation of your business in the end.

5. Consider The Transfer Limit

Some international banks and money transfer providers have daily, monthly, and yearly limits on the sum of money you can transact. There may also be extra fees depending on the amount to be converted. The exchange rate provided becomes increasingly essential, particularly when sending huge sums of money, because some providers determine their exchange rate in relation to the percentage of the money being transferred.

Conclusion

Sending and receiving money in foreign currencies has become more convenient, with reduced wait times and a wide range of transfer options. You can choose your preferred way of money transaction from wire transfer to mobile transfer. However, the process will differ based on the service provider you choose for your money transfer, the country, and the currency you'll send or receive. 

Wendy Fox 

Wendy Fox is a writer who focuses on business articles. She works with businesses that wish to rank better on search engines. She’s been published on various sites, with topics ranging from marketing, and financial analytics, to workplace productivity. Her main objective is to help entrepreneurs learn more about the industry.