Paying suppliers in USD: Here's how to leverage the most widely accepted currency in the world to improve relations with your supplier and negotiate better payment terms.
The USD is top of the food chain in foreign exchange and international payments. It's normal to pay your U.S. suppliers in this currency, but even non-U.S. suppliers may prefer USD payments for reasons such as:
Some countries like China¹ have U.S. dollar functional currency operations. The yuan or renminbi is pegged to the greenback, so currency conversion is unnecessary when paying in USD.
Suppliers from less stable economies may also strongly prefer the USD.
Multinational suppliers may require USD for their operations or foreign exchange swaps. They may also hedge foreign exchange risk using instruments like forward contracts to manage profit margins.
If your international supplier has requested payment in USD, here's the best way to go about it.
Find a good exchange rate and low transfer fees
Getting the best exchange rate is essential if you want to make the most of your business funds. You could pay your international suppliers through your business bank account, but the exchange rates are far from competitive, and transfer fees are high. You're better off choosing a specialist provider that works in bulk and can pass cost savings to you.
For example, a currency specialist like MTFX deals with large volumes of currency exchanges and offers exchange rates that beat the banks by 3-5%. That’s $1,500 on each $30,000 payment. You'll save more on larger supplier invoices in U.S. dollars or when making regular payments overseas. Low transfer fees mean you can lower the cost of your invoice payment processes even further.
Opt for convenient online transfers
Technology can be a critical tool for expediting your supply chain. By skipping the bank and using an online money transfer provider, you can settle invoices 24/7 without the inconvenience of waiting for official banking hours. For time-sensitive payments, having round-the-clock access to an online platform with best-in-class technology can be a significant advantage over banks.
It's particularly essential to find an online money transfer provider with a business-centric approach. MTFX can help streamline your international payments processes with custom solutions like multi-currency accounts and batch payments. Once you register your MTFX business account, you can count on automation technologies that eliminate error-prone manual data entry.
Check the speed of transfer
Making on-time payments is the best practice to strengthen your relationship with your international suppliers. Remember, your suppliers have deadlines of their own, so speed and efficiency are critical if you want to take advantage of discount opportunities or more favorable payment terms. Thankfully, you can expect your USD supplier payments to take 24-48 hours when using a specialist payment provider like MTFX.
MTFX also offers same-day transfers and has a global network of banking partners to ensure your funds arrive anywhere in the world quickly and efficiently. There are more benefits when your suppliers don't have to wait too long for their U.S. dollars, including a better business reputation and no late payment interest charges.
Look for a dedicated customer support system
When looking for the best way to make USD supplier payments, consider options that offer human help whenever you need it. Some transactions may require guidance or assistance from a dedicated account manager, especially if you want to develop an effective strategy to mitigate currency risk and protect your business's bottom line.
As a full-service foreign exchange platform, MTFX gives you a more personalized experience with foreign exchange specialists that can answer your questions and ensure the platform suits your business needs.
Use risk management tools
Currency markets are fluid and unpredictable since they're influenced by many factors, such as interest rates, political situations, and economic data releases. These fluctuations will determine the cost of your USD invoice. For example, Reuters ² reports that the Canadian dollar will strengthen against the USD over the coming year.
That means Canadian businesses can benefit from cheaper goods if the home currency maintains a solid performance against its U.S. counterpart. In contrast, if the home currency weakens, your USD invoice becomes more expensive for the same amount of goods.
The good news is that you're not entirely at the mercy of market volatility. You can use risk management tools, like a forward contract which allow you to lock in a desired exchange rate to protect your profit margins and ensure smooth cash flow.
Another risk management tool that gives you more control is a market order, which allows you to target the rate you want while controlling downside risk.
Pay your international suppliers in USD today
The world is now a global village where you can secure the best goods and services at the right price for your business. With technology ruling, there's no reason why your supplier can't receive payments in U.S. dollars if that's what they want.
Paying your suppliers in USD is simple with an MTFX business account. You can create your account within five minutes to start save money on your international invoice payments.
Sign up for a free account today to enjoy quick and easy transfers with competitive exchange rates and low transfer fees.
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Who can use the MTFX payment service?
Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into.
Personal clients usually use our services to transfer money between their own accounts in two different countries.
Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
Why should I use MTFX and not my own bank?
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands.
We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world.
Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
How do customers send funds to MTFX?
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
How long does it take MTFX to transfer funds?
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.
Please read the following update before logging in to your MTFX online account
We have updated our online dealing system to provide you with better functionality, more unique tools and an overall enhanced client experience. MTFX Online 2.0 is now available for your dealing needs. You can begin using our enhanced online portal today.
Please note that the traditional portal will be available for use until MAY 30th 2021 at which point it will be decommissioned.