HOW IS FX TRANSFER AN EASY WAY TO MAKE INTERNATIONAL PAYMENTS?

FX Transfer is an easy and cost-effective way to make international payments. It can save your business money on payment fees and enable you to strengthen supplier relationships with a transparent process.

The standard payment method requires businesses to re-enter vendor information every time they need to submit a payment. This can be time-consuming and prone to error.

FASTER TRANSACTIONS

Foreign exchange (FX) transactions can be complex and time-consuming. With international payments, a business must deal with FX rates, payment fees, and vendor profile information that often requires re-entry for each payment.

A common way to make international payments is through wire transfer, which can be costly and take longer than other payment methods. In addition, wire transfers don’t provide any in-process status reports to the sender or the recipient of the funds.

Other international money transfer providers may offer a more transparent, quicker, and simpler FX transfer experience, such as OFX’s zero-fee bank-to-bank transfer service. However, their exchange rates and fees aren’t always competitive compared to those offered by the big banks. And, they don’t have a 24/7 support line or human customer service.

LOWER FEES

When businesses make FX payments, intermediary fees can add up. For example, the fees charged to send money abroad can vary by country (e.g. the UK has strong banking relations, a well-established currency, and modern financial infrastructure, while Nigeria can be more expensive because of stricter bank regulations).

Then there are fees that aren’t transparent – such as the transaction fee that is charged to process an international wire transfer. These charges can often be avoided by using a digital platform that offers a simple, flat fee structure and only uses the real exchange rate, meaning more of your money makes it to the recipient.

MORE TRANSPARENCY

When it comes to FX transfers, there is often a lack of transparency around the fees charged and the margin included in exchange rates. The result is that populations like migrants and expatriates are losing out on affordable remittance services as billions are lost in hidden exchange rate markups each year.

FX pricing is highly complex, and there are many factors that drive the direction of a currency, including actual and expected monetary flows (purchasing power parity, interest rate differentials), economic news events, budget, and trade deficits or surpluses, and major cross-border M&A deals.

FX Transfer simplifies international payments and eliminates costs for companies paying suppliers in different currencies by using a single platform to review invoice details, approve payment amounts, and select an exchange rate. This process enables businesses to complete faster transfers with full visibility into the payment processing and zero intermediary fees. It also ensures that the final amount paid to a supplier matches their initial invoice.

REDUCED RISK

FX payments involve healthy amount of risk because international markets and economies are volatile. But that volatility doesn’t have to spell trouble for your business. Specialist foreign exchange services can provide cost-effective and convenient risk management tools that help you make sense of market fluctuations, and plan for future transfers.

In addition, central banks’ frequent opacity regarding their intervention triggers makes it difficult to gauge how much exchange rate tail risk they consider the market can manage on its own. This paper proposes a simple rule that, in conjunction with a policy hedging objective, can help to anchor intervention decisions on an evidence-based metric.

CONCLUSION

FX transfer also helps to reduce opportunistic and strategic behavior from market participants. Moreover, the adaptative feature of this approach makes it more robust to change behavior. It is therefore a suitable alternative to more complex hedging instruments.