Ten top tips for businesses making international payments

Carl Hasty, head trader with Smart Currency Exchange offers ten tips for businesses looking to make international payments.

Do your homework

There are now a wide range of options for making payments abroad. First and foremost, then, do your homework. Consider your requirements: do you need to make a few one-off payments? Or do you make regular payments to particular suppliers? For regular payments, a specialist foreign exchange (FX) supplier is the most cost effective option.

Look beyond banks

Banks were once the mainstream option for making international payments. However, technological and regulatory change has opened up the FX market. Many of the newer solutions compare favourably to banks – offering lower fees, more competitive exchange rates and better service.

Beware hidden charges

The two costs to consider when making payments abroad are fees and exchange rates. With some companies you need to be wary of hidden charges which can mask the true cost of a transaction. In terms of exchange rates, some providers might advertise ‘commission-free’ payments but then hike the exchange rate they offer. Look carefully at the small print whoever you use.

Ask about final costs

Look for transparency and openness from your FX provider. A reputable FX provider should happily tell you the final cost of your transaction after charges and exchange rates are taken into account, enabling you to make an informed decision.

In whose interests?

Our own FX traders are not paid commission – meaning they always have the client’s best interests at heart. This, for us, provides a safety net for the client, yet it is surprising given the scrutiny the financial services sector has been under of late that more firms don’t take our approach. Whichever FX supplier you choose, it is worth asking how their traders are paid.

Comparing rates

The UK has the most crowded FX brokering market in the EU. But how do you compare the exchange rates of various brokers? A number of useful comparison websites have set up to help with this - www.fxcompared.com is clear and easy to use.

Don’t forget security

Ensure your FX company is FSA authorised. Also satisfy yourself you are dealing with a reputable player. Ask for testimonials and find out how long the company has been in operation. Currency exchange businesses don’t have to be authorised by the FSA unless they are trading more than three million euros a month – meaning if there is a problem, you won’t be guaranteed full protection.

Service is key

We believe your FX and international payments provider should be doing more for you than simply providing competitive rates. They should work with your business to understand its goals and keep it up to date with events in FX markets – by doing so, your business could save thousands of pounds each year.

Timing is everything

We always inform clients when the exchange rate for the currency they are transacting in appears good – and offer them the choice to ‘buy in’ currency for future payments using a forward contract. Businesses save a fortune by getting the timing right; again, this is something a quality currency partner should help with.

Be careful!

FX markets are volatile right now, reflecting uncertainty in the global economy. Ask your FX supplier about hedging techniques which can help protect against wild fluctuations in exchange rates. They should be ready to explain about the principles of hedging – and how they apply to your business requirements - in a clear and easy to understand manner.

For more information about FX, please see www.smartcurrencybusiness.com and download our free Outlook. Alternatively call us to discuss your requirements on +44 (0)207 898 0500.

Casa Mining strike gold with Smart

Casa Mining are a leading mineral exploration company controlling large-scale projects in the Democratic Republic of Congo and Mozambique. Their primary activity involves scouting out areas to conduct exploration programmes in search of gold and other valuable minerals.

With suppliers and employees spread across Europe and Africa, Casa Mining are constantly dealing with transactions in a number of currencies including euros, sterling, Canadian dollars and South African rand.

Having grown concerned over the poor exchange rates offered by their bank, Financial Director Eoin O'Driscoll was urged to check out Smart Currency Exchange. The difference he discovered was startling. “Smart conducted an analysis of the rates that we were getting through our bank and compared it against what we would be getting if we were using them. I had never imagined we could make such a big saving. I now regularly perform comparisons and Smart's rates are consistently the best”.

As well as the competitive rates offered by Smart, it was the ease with which each transaction was made that appealed to Eoin: “Being able to deal with our transactions over email and on the phone has freed up valuable time to concentrate on other areas of the business. The main draw of Smart is the rates, but the fact that it makes our life so much easier is a fantastic added bonus”.

Eoin went on to explain how the personal service offered by Smart Trader, Siobhain Barry improved the service: “Siobhain's service has always been exemplary. Having one broker assigned to you removes any of the apprehension that you feel when transferring large sums of money. Having a face to put to the company, rather than just a website or a call centre, helps a great deal and gives you complete confidence when doing business”.

When asked to sum up Casa Mining's dealings with Smart, Eoin was happy to elaborate: “The service received is fast, efficient and pain free but by far the most important factor for us is the significantly better rates that we are offered. These don't just make a small difference to our business, they save us real money. On a typical year they save us between £20,000 – £25,000”.

It is clear that managing your foreign currency exposure effectively is a vital requirement of any business that deals internationally. For more information and to see how Smart Currency Exchange can save you money, get in touch with the team on 0207 898 0503.