How to Save Money on International Payments


Importing products and services from overseas can be a great way to reduce costs but the savings made are often lost through incurring unnecessary bank charges on international payments. Did you know the annual value of imports from the top 25 countries that trade with Britain total a staggering £274 billion!

 

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With an ever more global world this number is only set to rise, as many UK businesses look overseas to import goods and services that can benefit their local market. Not only can importing be a means of securing superior goods but it can also help save a company thousands of pounds in reduced costs. It is potentially a win-win situation but only if it is combined with the right international payment service. Most businesses carelessly waste these savings by using their bank rates on the high street to process international payments rather than employing a specialist foreign exchange broker.

But you don’t have to accept these unnecessary fees that negatively affect your business financially. Outlined below are the services offered by foreign exchange brokers and the positive impact they can have on your business. After reading it, you may reconsider whether your bank really is the most efficient and convenient way to make your international payments.

Hit by unnecessary charges
The world’s largest banks offer a range of ways to make payments overseas, allowing your business to choose a method that is most convenient. But there are a number of charges your business will incur.

For instance, to add an international payment facility to Business Internet banking, you will be charged around £6 a month. Companies wishing to regularly send larger amounts above £100,000 online will need to pay a setup fee of £350 and a minimum monthly fee of £21. On top of this, the average fee for sending each payment anywhere in the world is £17.

When sending payment you may prefer to use a more traditional method and make them via telephone. This option is even more costly as you will be charged a £30 payment fee per transaction for the privilege.

So you may then decide it would be simpler just to head to the local branch of your bank and make payments there. Again though, you will have to stump up a fee of £30 for each payment your business makes. This option also means your bank details will not be stored for future use – rather annoying if you wish to pay the same supplier again in the future.

Fees like these help to push up overheads for your business but they are not the main problem associated with using your bank to make your payments.

Exchange rates offered by banks are notoriously poor. In fact, the average exchange rate offered by major banks is a margin of 5% away from the headline (inter-bank rate), meaning your business pays even more money in the form of commission to the bank.

Once you have made your payment, there can be a significant time delay before funds are sent overseas, mainly when they are sent to non-EU countries. This is due to the layers of departments that a payment may have to pass through at a large bank. This can also impact on customer service if you have any issues, as a large bank covering a wide number of services can often be inefficient and slow in directing you to the correct person.

Luckily, there is another more efficient way of making payments that can reduce costs for your business.

An alternative method
Many businesses have turned away from using their bank to make payments and instead are using a foreign exchange broker.

On average, foreign exchange brokers charge a fee of £10 for their services, offering significantly more value than going through a bank. This fee soon drops to zero when sending amounts above £10,000. Not only do currency specialists save you money but the service is significantly improved making the whole process more straightforward and less time consuming. A specialist will allow you to manage your account online 24/7 and by phone during normal office hours. Payments are streamlined further by providing options to pay by bank transfer, direct debit or debit card (below £5,000) providing convenient, money saving transfers.

Brokers offer a consistently better exchange rate than banks, ensuring you are paying the least possible amount when settling an international payment. By focussing on offering cheap and effective foreign exchange transfers brokerage firms have a vast amount of experience and expertise in safely handling your payments. They are able to respond to any issues immediately and with in-depth, industry knowledge, offer you a more cost effective and thorough service.

Who to go with?
So you have decided to save your company money when making overseas payments and switch to using a foreign exchange broker but you are unsure which of the many firms to use.

This is a common problem for many businesses looking to reduce their overheads, as it is important to choose not only a top currency specialist but also the right broker for your company. There are many firms out there offering varied levels of service but at currencytoday.co.uk we only work with the leading firms who must meet the following criteria:

1. Authorised and regulated as a Payment Institution by the Financial Conduct Authority (FCA)
2. Licensed Money Transmitters by HM Revenue and Customs
3. Operate segregated client bank accounts in accordance with FCA rules on the safeguarding of client funds
4. Are well established and respected in the foreign exchange industry
5. Have a strong financial position (ownership, accounts, ratings and references)


We provide detailed information on the service offered by these firms to ensure you get the best possible exchange rate with no compromise on security, established in 2006, we offer completely impartial advise via our Currency Today website.

At currencytoday.co.uk we not only hand-pick the best exchange services out there but we then let you pick the right one for your business.

Case study
We have helped hundreds of businesses save thousands of pounds, including this toy manufacturer in the North-East of England.

A small, well run business that has been established for over thirty years, the North East based manufacturer found its production costs rising and began to look overseas for a new supplier. Having found a cheaper source for goods in China, it began outsourcing some of its manufacturing by importing parts from the Far East.

Due to a poor exchange rate and a £30 payment fee when making international payments through its bank, the company noticed this cost was having a negative impact on profit margins. Knowing it was getting a better deal with its new supplier, the Financial Director suspected the cost of making payments was the issue and began looking at ways to reduce this unnecessary overhead.

That is when he turned to currencytoday.co.uk The Director found the impartial advice and comparison table on the website extremely handy to easily identify the best foreign exchange firm for his company. The company began to use one of our brokers to make international payments and soon found that its costs were reduced. Its profit margin began increasing and it now uses this new foreign exchange specialist for making all foreign payments.

What to do next?
If your business is suffering from a similar problem and you want to reduce a needless overhead, then switching to a foreign exchange broker may be the way to go.

Complete our contact form below to find out how our experts can help you.

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