One of the nuances of an online business that I’ve discovered is that you are often dealing with partners from other countries. Surprisingly, communication is not the problem when dealing with international partners. I’ve found that most people can interact fine in English. However, sending and receiving money internationally raises unique issues. In particular, you want to find the best savings when changing your currency.
Most people think of this as an issue when travelling. It’s true that if you travel internationally, you do deal with the same issue of getting the best rate when changing your currency and trying to avoid excess fees.
I’ve discovered in the process of sending and receiving money through paypal and western union that it can be expensive to send money internationally.
Whether travelling or doing business overseas, there are a few ways that you can save money when exchanging your currency.
Shop For the Best Rates
I’ve found that the rates and fees sometimes vary depending on the service provider that you are using to exchange money. Paypal is a convenient way to do business online, but sometimes you can get better rates elsewhere. I’ve even found that the cost of sending money internationally to be cheaper when sending directly from my bank.
Regardless, there are a variety of ways to send and receive money internationally. The fees and rates do vary depending on the service provider, so shop around carefully to get the best deal.
Establish an Offshore Merchant Account
You’re online, you can establish your merchant accounts anywhere. If you find that you have partners primarily from a certain region, you might consider establishing a merchant bank account in that country. That way you can deal in that country’s currency without having to pay exchange rate fees. You may find that it’s cheaper to do business that way and then transfer the money back to yourself directly from the offshore account.
Larger Transactions Save Money
I’ve found that there are often fee tiers when transfering money internationally. This means that it can be cheaper to send or receive a large amount of money rather than making multiple small transactions. If you can, it will likely save money to make one large transfer rather than several small transfers.
Talk it Out with Your Partners
One thing you can do is negotiate with your overseas partners on who will pay the fees. If you don’t discuss this in advance, then you will often get stuck with the bill. But you can plan ahead and talk to them about the exchange rate fees in advance and work out an agreement. Perhaps you can agree to split the fees or agree that the other party will be responsible for the fees. This is a great way to save money in a business transaction.
If You Are Travelling, Plan Ahead
Whether you are going abroad on vacation or taking a business trip, it will save you money to plan ahead. I’ve found that it is often cheaper to deal in cash than having to withdraw money from an ATM overseas. If you plan ahead so that you don’t run out of cash while travelling, you will save money.
If You Don’t Have Cash a Credit Card is Cheaper than an ATM
This is a lesson I learned while travelling. If you do run out of cash try to get by with a credit card. An ATM will often charge extra bank fees. Not only will you be charged the exchange rate, but most banks have their own local fees and then your bank will charge extra fees for using an international ATM.
Try to Use Local Money
Coming from the US, I’ve found that many international merchants will take US Currency, but they tend to charge more. I’ve found that local merchants will often charge a higher exchange rate than even the local banks if you pay in US Currency. If you are able, exchange your money and use the local currency to pay for things.
These are a few things that I’ve learned from travelling abroad and business dealings with people in other countries. It’s good to do your research in advance. I generally find that cash is king, but you still need to research and look into getting the best bang for your buck. There are a variety of online sources to help you save money on exchanging currency. You can find the best exchange rates at Compareholidaymoney.com