Easy Guide to Cheap Business Currency Transfers

There might be many reasons why your small business isn’t thriving. One of them is the global economic crisis caused by the COVID-19 pandemic. However, for all that this recession is hitting all businesses hard, it also kicked e-commerce into high gear. Also, going global has become a necessity for businesses. After all, this gives you an opportunity to both cut costs and grow your customer pools.

But doing any kind of business internationally means you will need to send and receive money transfers from abroad. This itself is a costly endeavor. It’s costly enough that the cost of the transfer might eat up all your profit margin.

While you are developing a strategy for going global, you need to find a way to cut your currency costs. The good news is that today there are companies that allow you to reduce the cost of both the transfer and foreign currency exchange (FX or forex). But you’ll need to think carefully to pick the one that will benefit your business most in the long term.

How expensive are international money transfers?

The costs of foreign currency exchange and international money transfer fees are not the only issues you need to consider if you want to avoid being ripped off while traveling. As a business, making payments to suppliers or accepting them from customers also come with an FX price tag. And that price might be over 10 percent of the transfer volume.

Any small business trying to go global will know that the profit margin for this venture might be so small that 10 percent makes it unviable. But of course, the actual cost of international money transfers depends on many factors. The foremost is what financial institution you are using to make the transfer.

The traditional way to go is to use a bank wire transfer. That’s the safest method of international money transfers. However, it’s also one of the most expensive. For example, in the US the average outgoing international transfer fee is $45. Add to that the money lost during foreign currency exchange. Banks always use an unfavorable FX rate due to their high FX margins. Also, the fees (meaning your losses) might increase with the transfer volume.

Also, remember that some currency corridors to developing countries are far more expensive. There are still some African countries where a...

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