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Home / Tenders Blog / How to Receive International Payments
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Tuesday 31st August 2010
How to Receive International Payments
It requires some consideration to ensure the most cost-effective method of converting foreign currencies into sterling when receiving international payments. The variance in banking systems within Europe and further afield means you will require a foreign exchange currency transfer service, provided either by a bank or a specialist broker.
 
The two key factors in assessing the best value currency transfer deal are the exchange rate offered and fees charged for the service.
 
Major Banks rarely offer the best value for international payments, due to generally uncompetitive exchange rates and relatively high ‘receiving fees’ charged for the service. Some may have special facilities for existing customers though, so can be worth considering, and at the very least they offer a useful benchmark price for the purpose of comparison.
 
Foreign exchange brokerage firms are able to offer much more favourable exchange rates due to the very high volume of foreign currency they trade, meaning they can return a profit from a lower margin. Coupled with this, specialist currency transfer firms operate in a highly competitive market place meaning fees are kept low for their clients. The large brokerage firms provide an online service that can be very useful for tracking international payments you are due.
 
Some brokerage firms offer to match the lowest verifiable quote with a ‘best exchange rate guarantee’, a commission-free service, and the option to fix the exchange rate price for a future currency transfer. ‘Forward contracts’ allow you to set the exchange rate price of international payments up to a year before they are received, protecting your expected sterling revenue from currency fluctuations.
 
It is worth noting that exchange rates and fees are typically less favourable for lower value currency transfers, and rates change constantly - often by the minute, so if comparing brokerages ensure you get your quotes at the same time.
 
It ‘s important to consider that foreign exchange brokers are not required to be regulated by the FSA, however the large established businesses trade on reputation and service, and some research will reveal that these companies work hard to establish their stability. World First, for example, deposits money with HSBC for pending international payments to guarantee its protection.
 
In summary, enquire with your bank first then compare offers from foreign exchange brokerage firms, considering exchange rates, fees and the additional currency transfer services they offer.
 


Posted by: Admin, on August 31st 2010 on 02:12pm
Labels: international payments

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