Foreign exchange (FX) markets are used by small and medium-sized enterprises (SMEs) to handle foreign payments and to convert funds between different currencies. Foreign exchange trading is commonplace, and it’s vital to save money when you engage in it.
Here’s what you should know as a business owner.
The importance of saving money as an SME
It’s important to save money if you operate a small or medium-sized enterprise. The rising cost of business, combined with an unpredictable economy, makes cost-saving a must.
Saving money will help you prepare for unexpected events that cost your business money or lead to a reduction in revenue. Saving money can allow you to earn more while charging your clients and partners less, and saving money will also give you more wealth to invest.
One way to save money — assuming that you work with companies and clients globally — is to reduce the price that you pay for foreign currency exchange services.
How can a business save money on foreign exchange?
By opening a multi-currency account with Payset or another service provider, your business can save money on foreign exchange services and currency conversion.
Whereas banks traditionally charge high fees on foreign exchange, Payset offers fees that are tailored to your particular needs. Incoming transactions are is always free, and outgoing transaction fees begin at 0.45%. Currency conversion fees are available on request.
With Payset, you can receive, purchase, and hold different currencies at once. This means that you can save money on conversion fees by purchasing or holding the currencies that you need. This way, you won’t need to change currencies when you make a transaction.
And most importantly: by paying lower fees on foreign exchange activities, you’ll be able to spend your money more efficiently elsewhere.
How long do international foreign exchange payments take to process?
International foreign exchange payments can take any amount of time to complete.
The exact speed of your foreign currency transaction depends on the network and areas involved. However, standard foreign bank transactions usually take one to five days. Transactions on dedicated networks, such as Europe’s SEPA network, may take less time.
Banks and payment processors must take various steps before completing a transaction. This includes fraud detection and identity checks (also known as KYC or “know your customer” checks). The bank or service must also arrange currency conversions in many cases, and this step may increase the time that it takes to perform a transaction.
Furthermore, international banks may operate in different time zones, and most banks do not work around the clock. Most financial institutions take time off on holidays and weekends. As such, bank schedules are not always arranged to handle rapid international payments.
You can ensure that your payments and trades are completed quickly and inexpensively by transacting on an network that you and your transaction partner have both agreed to.
At Payset, you’ll get fast and free payments when you transact with another Payset user.
How can SMEs prepare to make foreign exchange payments and transfers?
If you operate a small or medium-sized enterprise (SME), you may want to make arrangements before you participate in foreign exchange transfers and payments. Otherwise, you may face unexpected fees, inconvenient exchange rates, and other issues.
Here’s what you can do before you arrange a foreign exchange plan.
Plan your international money transfer strategy
When you plan your international money transfer strategy, you should consider certain priorities. For example, you should consider whether you need rapid settlement, affordable fees, or support for a wide variety of countries and currencies.
You should also decide which foreign assets you plan to hold, spend, or convert to your local currency. There are at least 180 recognized foreign currencies, and they are not universally supported. Choosing a compatible service is important.
After you have considered these matters, you can select a service that meets your needs.
Find out about fees and costs
Before selecting a service, you should find out about fees and costs.
You will almost always pay transaction fees and conversion fees on any given forex transaction. You may need to pay account setup fees and monthly fees as well.
These fees are largely unavoidable because it costs money for your payment provider to operate their services and convert between the required currencies. If you do not plan for these costs, which are often passed on to you, your business may be less profitable.
You can find out about Payset’s fees on our website.
Our fees are designed to be affordable: in addition to outgoing transaction fees starting at 0.45%, we offer incoming transactions and free transfers to other Payset users. We also offer conversion fees tailored to the details of your transaction.
Use exchange rate tools
Foreign exchange rates fluctuate frequently. It is best to purchase a certain foreign currency when your local currency has the highest market value or buying power. Conversely, it is best to sell or spend a foreign currency when it has the highest value or buying power.
To make profitable trades, you’ll need to monitor the foreign exchange markets carefully. Fortunately, sites that provide this feature are widely available online, and many of these sites provide automatic alerts as well as manual exchange rate lookups.
You can use Payset’s FX rate tool to view the latest forex rates and prices.
Use timing to your advantage
In order to ensure that your foreign exchange transaction is completed quickly and at the expected rate, you should transact at times when banks and other services operate.
If you are not transacting outside of your time zone, you should transact during regular business hours in your own country. On the other hand, if you are transacting or trading across time zones, you should consider when other countries’ business hours end.
Open a multi-currency account with Payset
By opening a multi-currency account with Payset as a small or medium-sized enterprise (SME), you’ll be able to save money when you make foreign exchange transactions.
If you use your multi-currency account properly, you’ll be able to pay lower and tailored fees on all transactions, and you’ll be able to store the specific foreign currencies you need. By joining Payset, you’ll also gain access to our virtual IBAN accounts, currency passport, and other tools that simplify cross-border transactions and forex trading.
Payset also offers support for a wide variety of currencies: we support exchanges between 38 currencies, and customers can hold 34 currencies at once. Payset is available in over 70 countries and allows you to send/receive payments in 180+ countries.
