We live in testing economic times. The global economy is still in the post COVID-recovery phase, the world political order appears to be quaking, and then there is the cost of living cris. As such, some businesses are quite literally even struggling to keep the lights on and need to take extra care of their expenditure. This is especially true for any organisation that does business globally with foreign exchange (forex) rates being so tumultuous. Therefore in this post, we are going to take a look at corporate foreign exchange and how a business can save money on making international business money transfers. By the end, you will know a few handy ways to cut costs when transferring money abroad for business and we will also introduce some of the best services for international money transfer.
Making a Business Money Transfer Using The Banks
Any business that needs to make an international transfer or overseas payment may well be tempted to ask their bank to handle it. Afterall, all they need to do is call up the bank, speak to their international payments team and off it goes.
However, this would be expensive. When banks handle international transfers they apply transaction fees which can range from a few dollars, to a percentage figure of the amount being transferred. As well as charging a fee, they also get to choose the forex rate and will always apply one which benefits them at the expense of the account holder. Finally, the recipient’s bank will also charge a fee as will any intermediary banks that are involved in the transaction.
This is simply one of the ways in which the banks make a profit – but a foregn payment can end up costing the sender an extra 3% – 5% which in the case of a business customer, eats into their own profitability.
Saving Money on International Money Transfer
Fortunately there are plenty of other ways to send money abroad and make b2b international payments.
- Specialist Money Transfer Companies
There are plenty of companies specialising in international money transfers. They aim to provide faster and cheaper foreign payments to both private and business clients. They are able to offer better rates and services than the banks as they can utilise their extensive network of international offices and often, can completely bypass the banking SWIFT system. Furthermore they can offer better forex rates as they trade currencies at large volume and can pass these benefits on their clients.
We will look at a few of these companies in the next section but generally, most of them offer free accounts – customers are completely free to use their services as and when they need to.
- Corporate Foreign Exchange Services
Whilst money transfer companies are very useful for making or receiving basic money transfers, some businesses need a little more. Corporate foreign exchange providers specialise in assisting and advising businesses that regularly transact with foreign clients in a wide range of currencies.
Corporate Finance services can offer a business multi currency accounts allowing them to hold a standing balance in a number of currencies and also allow business to currency “hedge” and by a foreign currency in advance to lock in a favourable exchange rate. Generally a corporate foreign exchange provider will also offer a dedicated account manager who can offer personalised advice to a business.
The Best Money Transfer Services For Business
There are a lot of different money transfer and corporate exchange services out there. However we will now introduce some of the best services for international money transfer.
Founded as Transferwise in 2010, London/Tallinn based Wise has grown to become a leader in the fin-tech and eBank space. They are possibly one of the best known money transfer providers in the world with transfer fees starting at 0.35%. Wise can also offer very competitive foriegn exchange rates, and they allow customers to open multi currency accounts.
Opening a Wise account is fast and easy, their website and app interfaces are very intuitive to use and they do not charge businesses a standing account fee.
Moneycorp is a multinational giant and subsidiary of the Bridgepoint group. They offer global payment and foreign exchange services to both private and business customers.
Moneycorp can offer business exchanges in 33 currencies and can help them make payments to over 190 countries all without incurring any bank transfer fees. However, some customers have regarded that Moneycorp often applies a slight mark-up on forex rates much like the banks do.
- Currencies Direct
Currencies Direct are proper forex specialists who can offer full Corporate client services. They allow business customers to enter into hedging strategies such forward agreements or buying currencies in advance. They also offer multi currency accounts. Account management services are also available for any business that feels they need this service.
Final Thoughts on Transferring Money Abroad For Business
Any business that is trading globally, doing b2b international payments, or making an international money transfer is going to incur some costs. However, these can be cut and mitigated simply by using the right service providers. Whilst some businesses’ needs will be perfectly well catered using one of the best money transfer services or money transfer companies, others may find a corporate foreign exchange service better suits them.
Either way you now know some of the best money transfer services as well as some of the best corporate foreign exchange services to help save on a business money transfer.