Following on from last week’s blog, this time around we will be looking at the options to send money abroad from a business perspective.
If you think more choices for businesses make things easier, think again! There are so many options out there that offer varying services and rates that making the right choice can be quite tricky.
Most businesses will turn to their bank first, as the obvious choice of partner. However there are substantial savings to be made if they spend some time researching other providers and selecting the one that offers the best possible deal.
The costs largely depend on how much you want to send, where you are sending (whether inside or outside the EU), how often and how quickly you want the funds to reach your chosen destination.
Most banks offer international payments platforms as well as options to send money abroad. Here again is where the cost will vary tremendously, and sometimes will even double depending on how you wish to send the payment (online, by telephone or in a branch) or if you choose to send an international draft or open an international bank account (also known as an offshore account).
The elements you want to compare when looking at providers are the following:
- Cost of Single Euro Payment Area payments (within the EU)
- Cost of international payments (falling outside of the EU)
- Monthly payments or maintenance fees for business accounts
- Exchange rates (this changes at a regular basis so you want to keep track)
Before transferring money abroad, always remember that both you and the beneficiary (the person receiving payments) may have to pay some transfer fees, so you need to establish this up front and agree who pays with the receiver. If fees are paid from both sides, you will need to choose the option that will be most cost-effective for both parties.
Companies can also use business credit or debit cards to pay suppliers when traveling abroad. In most cases, you can use your card abroad as you would do at home and this can be cheaper than sending money overseas. Prepaid cards with special deals on foreign exchange that I talked about last week are also a good option for businesses, as well as consumers, traveling overseas.
If you cannot get a competitive service through a high street bank, you still have the option to use a foreign currency specialist. Most of the advice given last week pertinent to consumers is also applicable to businesses: compare the different providers out there to ensure you uncover any commission costs, as well as comparing the actual foreign exchange rates used.
This leads us to our top tips for businesses sending money abroad:
- Do you research and make sure you get the best exchange rate, lower transfer fees and uncover any other fees that aren’t immediately obvious
- When possible check if the company you are using is regulated by the FSA or not. This means that for large transfers, should the company handling your payments suddenly go bust, you will be able to get your money back.
- Ensure you are clear on which party (you or the recipient) is responsible for the payment of fees and charges.
- Compare! Compare! Compare!