Best Ways to Pay a Supplier in a Different Currency

Going global is a great move for your business. However, it also causes you a number of headaches, such as communication, lead times, delivery times and payment. However, arguably the issue that will have the biggest impact on your business is payment and exchange rates. Here are the three best ways that you can pay suppliers when you’re operating in different currencies.

#3 PayPal

eBay made PayPal a household name. PayPal is a safe and secure way of transferring funds from one person or company to another, and it provides your business with a good amount of protection should goods never arrive.

With PayPal you can transfer money in any currency, and you have the ability to check the rates before you make a payment.

However, PayPal is only good for small amounts of funds, and the charges can be extortionate. This means the rate isn’t necessarily reflective of how much you pay as you’re also paying a large transaction fee with each payment. So, it’s good for one off payments, but not regular transactions.

#2 Bank Transfer

Speak to the bank that you have a business account with, as they’re likely to be able to help you. With the bank, you can exchange at a pre-agreed rate, so you don’t have to worry about the rate changing prior to your transaction if there are any delays.

However, bank fees for these sorts of transactions can be extortionate so, even though you can transfer large volumes if money safely and securely, it’s a pricey way about going about it.

#1 Dedicated Exchange Companies

Banks may be slightly better than using PayPal, but dedicated exchange companies such as CurrencyFair are even better still.

These companies are dedicated to finding you the best possible available rate and charging you as little as possible for their services – sometimes they charge as little as 5% of bank fees, so savings can be large.

You just need to research the company thoroughly beforehand to make sure that they’re as secure as popping down to your local bank is. However, because they’re dedicated to sending money abroad, they’re specialists, so you often have very little to worry about.

To conclude, going global with your business is a great opportunity, but it’s also one that will present challenges. However, if you can control your exchange rate and cash flow using one of these techniques, you should have no problem.