Global business money transfers can be essential for sending money across borders to pay suppliers and employees or to make investments. Whether you’re using banks, specialized financial services or international foreign exchange (FX) platforms like OFX, these transfers involve converting one currency to another.
Currency exchange rates for these transfers depend on the foreign exchange market, which sets the exchange rates and helps ensure your money arrives in the correct currency. If you’re planning to send money internationally, here are five things to keep in mind.
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1. The Difference Between Currency Brokers vs. Banks
The main difference between international FX payment services—or currency brokers—and banks for global money transfers lies in their services and fees.
Banks typically offer a wide range of financial services, including account management, loans and other banking products. However, their currency exchange services may come with higher fees and less competitive exchange rates.
Currency specialists or brokers, on the other hand, specialize in foreign exchange transactions. They may offer more competitive rates and lower fees, making them a popular option for individuals and businesses that regularly send money internationally. An international FX payment service, like OFX, may offer cost-effective transfers across various currencies through a user-friendly platform. Some FX platforms may also allow you to lock in exchange rates for future transfers, aiming to provide stability in an otherwise volatile foreign exchange market.
2. Rates and Fees
When sending money internationally, both exchange rate margins and transaction fees can affect your overall costs, particularly with transactions over $10,000 or frequent transfers. The main costs you may encounter include:
- Exchange rate margins: This is the difference between the market exchange rate and the rate offered by your service provider. For example, you might pay more for a currency conversion than the actual market value. Some FX specialists offer more competitive rates with lower margins than traditional banks, potentially giving you more value for your money.
- Transaction fees: Banks and FX specialists typically charge transaction fees to process transfers. These fees can vary as some financial institutions charge a flat rate per transfer, while others take a percentage of the amount transferred. Currency specialists can typically offer lower transaction fees than banks.
3. Processing Time
Speed is another factor to consider when sending money abroad for your business, especially for international payroll or paying an overseas supplier. Ensuring that employees are paid on time, no matter where they are, is important. Fast processing—ideally within a single day—can help you meet payroll deadlines to keep employees satisfied and operations running smoothly. Currency specialists with global networks of local banks often offer same-day payments, including OFX.
On the other hand, low-cost foreign payment options may offer attractive rates but could come with longer processing times, sometimes taking several days. While these options may help you save money upfront, payment delays could lead to employee dissatisfaction and disruptions in productivity. Faster transfers can help manage cash flow, foster an engaged global workforce and support strong vendor relationships.
4. Service and Security
Choosing an international FX payment service that prioritizes security and customer support may help you spend more time on your core business activities. When choosing an FX partner for international money transfers, consider prioritizing security and compliance with currency exchange regulations. Ensuring the FX partner holds the necessary federal and state licenses can be key.
Customer service can also be important, especially if the international FX payment service offers 24/7 support. Currency specialists like OFX aim to balance automation with personalized 24/7 support, enabling them to quickly address any issues or concerns so your business can continue to run smoothly.
5. Risk Management Tools
Risk management is another key consideration when sending money abroad for your business. Fluctuations in foreign exchange rates can impact transaction costs and overall financial performance. To help manage these risks, consider leveraging strategies and FX tools to handle unexpected rate changes. Develop a risk management plan, research market trends and keep in mind hedging techniques like forward contracts, which allow you to lock in an exchange rate for a future date.
Some FX partners offer risk management tools and planning to help protect your businesses’ global transactions. Professional guidance and risk management solutions can help you confidently manage international money transfers while minimizing financial uncertainty, helping ensure your operations continue to run smoothly.
International Transfers
Transfers available in more than 170 countries and over 50 currencies.
Fees
$0 wire and transfer fees. Exclusive best in market rates for Forbes Advisor visitors.
Secure and Trusted
25+ years’ experience, ASX listed. Regulated by 50+ regulators globally. Over 1M customers.
Choosing a Currency Partner for Global Money Transfers
Handling global money transfers may require understanding the differences between currency specialists and banks, including their rates, fees, processing times, security and risk management tools. An international FX payment service like OFX may offer advantages, such as lower costs and streamlined processes, which can lead to competitive savings and smoother international transfers.