How Your Export Business Can Secure Beyond-Standard Bank Rates for Global Payments

Running an international corporation in the modern age is a problem. Not an insurmountable problem, but a problem nonetheless. There’s a lot to consider with respect to international finances, spurred in no small part by President Donald Trump’s divisive approach to geopolitics – an approach which saw heavy tariffs levied on goods imported from a majority of key trade partners.

This has been a difficult period of time for international enterprises new and old. It is a time that shows no sign of letting up, either. As such, businesses are required to act more shrewdly with respect to their own financial movements – including global payments. When financial leakage is less permissible than ever, the following steps are nothing short of essential to minimizing the costs associated with international transactions.

Audit Your True FX And Payment Cost Base

Any transaction you make that crosses a border, even if simply via a bank transaction from country A to country B, is beholden to costs associated with not just facilitating the transfer but also managing the exchange between currencies. That exchange rate can sting in certain situations – and is not made any better by additional costs your bank can levy.

There are often hidden costs; banks may factor in wider spreads, delay execution and otherwise exercise less transparency in cross-border payments than you might expect. These costs are worth interrogating, particularly when global cross-border payment volumes are on the rise (and yours, likely, with them).

Leverage Fintech And Non-Bank Providers

The eagle-eyed amongst you may have noticed a key aspect to the above focus. So far, we’ve looked exclusively at banking transactions. With the knowledge that banks are of the predilection to add on secret fees and hiked exchange costs, there is an opportunity for your business to approach global payments another way: by leveraging fintech and non-bank financial service providers for better rates and execution.

As an export business, you may well be better-able to handle global payments using newer platforms in fintech spaces, or utilizing specialized FX providers – either of which can offer tighter spreads, faster settlement and ultimately greater currency flexibility. With these newer approaches, money transfer overseas can be managed without reckoning with predatory payment fees and processes.

Structure Your Outgoing And Incoming Currency Flows

Any export businesses deals both in international income and outgoings – which do not necessarily see the same rates observed back and forth. Add in a febrile geopolitical atmosphere and you have a changeable environment, where cashflow fluctuates not on the basis of success but instead on external factors.

These factors can be mitigated, though. The trick is to anticipate foreign currency receivables (exports) and payables (suppliers abroad) and match them, using forward contracts or options to lock in favorable exchange rates that don’t neuter your profits.

Establish A Formal Payment Policy

All of the above leads, naturally, to this final and essential point. In order to enshrine any of this for the ultimate good of your export business, you need to formalize your payment policy. This will mean dedicating some manpower to reading the markets on your behalf, using that information to create followable processes and standardize payment approvals.