Maximising your profits: 3 ways to save money on international payments
Making international payments can be a costly endeavour for businesses. There are various fees involved, such as exchange rate markups, bank fees, and intermediary fees, that can add up quickly and eat into your overall profits. However, with careful planning and the use of certain strategies, your businesses can start saving money on international payments to maximise your profits.
We've rounded up our top three ways your business can start to save money on international payments:
- Shop around for the best exchange rates: Exchange rates can vary significantly from one financial institution to another. It's important to compare rates from multiple sources, such as banks, online currency exchange platforms, and credit card companies, to find the most favourable rate. It's worth noting that online currency exchange platforms, credit card companies and fintechs may offer more competitive rates than banks, as they often have lower overhead costs. However, it's important to also consider the reputation and security of the provider before deciding.
- Use a business credit card with lower foreign transaction fees: Some business credit cards charge lower foreign transaction fees, which translates into significant cost savings on international payments. Which is why it’s always important to compare the fees of different credit cards to find one that offers the best deals.
- Take advantage of forward contracts: A forward contract allows businesses to lock in an exchange rate for a future transaction, protecting against currency fluctuations. This can be especially useful for businesses that make frequent international payments or have large, one-time payments planned. Forward contracts can provide peace of mind and help businesses budget more accurately, as you’ll know exactly how much you’ll be paying in the future. However, it's important to carefully review the terms and conditions of a forward contract, as they may be subject to fees and may not be suitable for all businesses.
In addition to the three strategies mentioned above, it's also important to keep in mind the impact international payments have on your business’ cash flow.
Here's 2 bonus best practices when it comes to international payments:
- Plan ahead: If you know your business will be making international payments in the future, you can plan ahead and make sure your business has enough cash on hand to cover the payments. This can help your business avoid taking on debt or incurring additional fees.
- Negotiate payment terms: If your business is making a large international payment, you may be able to negotiate longer payment terms with your beneficiary. This can help spread out the payment over a longer period of time and ease the financial burden on your business.
Armed with these tips, your business can start saving money on international payments, reduce the financial impact on your bottom line and avoid financial strain. Whatever your strategy though, it’s important to research and compare different options to find the solution that works best for your specific needs and goals.
Save money on international payments with Paytron
With Paytron, you can send money internationally with no limitations. Our bank beating FX rates will help your business save up to 90% on FX costs. Plus, our built-in FX conversion calculators display the full breakdown of costs involved, making it easy to better manage your cash flow.
Dealing with suppliers in AU, UK, USA or EU? We offer businesses the ability to transact like a local which means you can send or receive money as a domestic transaction within the same day. No need for SWIFT.
Get in touch with us today to see how we can help your business save money on international payments.