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Have you considered paying your vendors in their local currencies? This is why you should
You might have thought that using your home currency for your international transactions versus the local currency of the supplier was your simplest option, but if you pay attention to the entire transaction process, going this route leaves you and your business susceptible to market volatility while at the same time potentially forcing you to pay double the conversion fees.
When it comes to doing business across borders, one party always needs to be responsible for the currency exchange. Depending on the market in which you are making your vendor payments, there is a chance you could be paying a premium that exceeds the cost of converting your currency without realizing it.
When it comes to cross-border payments and using your home currency to pay your vendors, you could be at the mercy of paying a lot of players along the way before your transaction is fully settled. Fees can arise from your bank for processing an international wire transfer to make the vendor payment (ranging anywhere from $10-$50), in most cases an intermediary bank is required when paying a vendor internationally and when used they take an additional processing fee, the beneficiary bank for your vendor will also take a fee when the payment reaches their bank account, and additionally, there will be another conversion fee to transfer your home currency funds into the local currency of your vendor to complete the payment.
When all those steps are finalized, you end up paying an additional sum of upwards of 7 percent. You, and your business, also shoulder the risk that your currency could lose value in transit due to fluctuating currency exchange rates between the time of your invoice payment and the final settlement, which can be lengthy.
Innovative fintech has emerged in the category offering local in-country payment solutions that can save your business the fees noted above while at the same time, reducing your businesses FX exposure by giving you the ability to make payments and hold funds in multi-currency accounts that you can access any time, 24/7, thus removing the need to make costly currency conversions.
Not only can you save on processing and currency exchange fees with local in-country payments, but next-generation solutions from fintech leaders in the space, like MTFX, can also enable direct integration of these solutions into your business ERP system, removing all the manual reconciliation work that is normally required to balance and record your overseas business transactions.
MTFX’s international payout solution provides your business access to +100 currencies, including exotic, and is compatible with all of the top ERP systems in the market including, Quickbooks, Oracle, SAP, Dynamics 365, and Sage, among others. This solution facilitates, through API automation, the generation of your payables as well as the settlement of your overseas business payments, all in one easy-to-use portal so you can keep track of your cash flow while saving both time and money.
Learn more about how our payment platform can help you retain your local customers and expand your business globally.
Open an account today with MTFX and start enjoying fast, cost-effective, and convenient international money transfers.
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