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5 tips for foreign trading companies in money transfer with international trading

Business Finance

5 tips for foreign trading companies in money transfer with international trading


Feb 27, 2024

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Running a foreign trading company requires transferring money abroad or receiving money from other countries. This is especially true for an international trading business in import export industries. Therefore, you require a swift, dependable, and economical method to manage your financial transactions.

International payments can be complex and risky, especially when dealing with different currencies, regulations and intermediaries.

This article will provide insights and tips for executing international payments in international trade.

5 tips for international trading company in money transfer

One of the challenges of running and learning import export business is how to transfer money internationally without losing too much on fees, exchange rates, and delays.

Consider these tips to select the optimal choice for your business:

Tip 1: Compare different payment providers

Various services cater to international money transfers, including banks, online platforms, and money transfer operators, each with its unique pros and cons, such as speed, cost, convenience, and security.

You should compare them based on the following criteria:

  • Exchange rate: The exchange rate dictates the amount of one currency you receive in exchange for another. Banks usually markup exchange rates by 2-3%, but some may charge as much as 5%.

Online payment providers often provide better rates, with markups ranging from 0.35% to 1.5% on currency conversions (Source:Copperx).

  • Fee: The fee is what you pay for using a payment method or service, and lower fees mean less expense for your transaction. Banks typically impose a flat fee for international money transfers, ranging from $25 to $50, with some also deducting a percentage of the transfer amount. (source: Greenice.)

Online payment providers often have fixed fees, like £5 or €7 for transfers up to £5000 or €5000 (source: Greenice).

Online payment providers often provide better rates.

Online payment providers often provide better rates.

  • Speed: Transfer speed denotes the duration it takes for funds to reach the recipient, with quicker speeds offering reduced waiting times and increased convenience.

Bank transfers can take several days, especially to countries with less developed financial systems. In contrast, Online payment providers often offer faster speeds, completing transactions in minutes or hours.

  • Security: The level of protection and trustworthiness of the payment method or provider. A higher security means less risk and more peace of mind.
  • Convenience: The ease and accessibility of the payment method or provider. A higher convenience means less hassle and more satisfaction.

This table can help you in making comparison (source: Remittance Prices Worldwide Database)

Features Banks Online payment providers
Average transfer fee $25-$50 per transaction + potential percentage of transfer amount Varies, often lower than banks ($0-$10 per transaction)
Exchange rate markup 2-3% (can reach 5%) Typically lower markup (0.35%-1.5%)
Additional fees May charge hidden fees, wire transfer fees, account maintenance fees Often transparent with all fees disclosed upfront
Speed of transfer Can take several days Typically faster, often within minutes or hours
Minimum transfer amount Varies, often high Often no minimum or lower minimums

Tip 2: Plan ahead in international trading transactions

If you know when you need to make a payment or receive a payment, you can plan ahead and avoid unnecessary delays or costs.

You can plan ahead and avoid unnecessary delays or costs.

You can plan ahead and avoid unnecessary delays or costs.

For example, you can use a forward contract to lock in a favorable exchange rate for a future transfer, or you can schedule a regular transfer to automate your payments.

You can also avoid peak times and holidays when transfers may take longer or cost more.

Tip 3: Use online platforms for convenient and low-cost payments

Online platforms have been popular that allow you to send and receive money internationally through their websites or apps.

They usually offer competitive exchange rates and low fees compared to traditional banks.

Worldwide digital wallet users: 4.8 billion in 2022, projected to reach 6.4 billion by 2027. Mobile payment users globally: 2.1 billion in 2022, expected to grow to 4.7 billion by 2027 (Source: eMarketer, 2023).

These figures illustrate the increasing popularity of online platforms for making payments, suggesting growing user acceptance and perceived convenience.

Studies show users perceive online platforms as more convenient than traditional methods due to features like instant transfers, mobile compatibility, and bill pay functionality (Source: Federal Reserve Bank of Boston, 2020).

Tip 4: Keep track of your payments and receipts

Keeping all records of your international money transfers is crucial for accounting, tax, and legal purposes.

Be sure to retain receipts, invoices, contracts, and other relevant documents to ensure accuracy and detect any errors or fraudulent activities.

You should keep track of your payments and receipts.

You should keep track of your payments and receipts.

  • Date and time
  • Amount and currency
  • Payment method or provider
  • Sender and recipient details
  • Transaction reference number or confirmation code
  • Exchange rate and fee (if applicable)

You should also check your bank statements and online platform accounts regularly to make sure that there are no errors or discrepancies in your transactions.

Tip 5: Manage currency risks in international trading transactions

Business owners should stay updated on market trends to anticipate and manage economic changes and currency fluctuations effectively.

They can explore hedging strategies such as forward contracts or options to secure exchange rates and safeguard their profits. Additionally, diversifying currency exposure by conducting transactions in multiple currencies can minimize reliance on any single volatile market.

DNBC Financial Group: Remittance solution for international trading

DNBC Financial Group provides a remittance solution for streamlining international money transfers, with a particular focus on supporting import and export businesses.

Leveraging advanced technology and a global network, DNBC offers efficient and reliable transfer services tailored to the unique needs of businesses engaged in cross-border trade.

With seamless transactions, competitive exchange rates, and dedicated support, DNBC Financial Group stands as a trusted partner for navigating the complexities of international trading.

DNBC Financial Group is your trusted provider in international money transfer

  • Get 100% free 1-on-1 support
  • 100% free account opening
  • Seamless onboarding process
get free consultation

Or please contact DNBC

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Note: The content in this article is for general informative purposes only. You should conduct your own research or ask for specialist advice before making any financial decisions. All information in this article is current as of the date of publication, and DNBC Financial Group reserves the right to modify, add, or remove any information. We don’t provide any express or implied representations, warranties, or guarantees regarding the accuracy, completeness, or currency of the content within this publication.