How to save money on international business payments in the UK
Do you have issues with high transfer fees when you make international payments as a UK business? This can be an uncomfortable place to be in.
As a business, you want profit maximization, not something that takes up your money. You also cannot avoid international payments for so many reasons.
You will have customers, suppliers, workers, and business partners in other countries whom you need to transfer money to.
So how can you save money on these international payments? Read this blog post to see how.
7 ways to save money on international business payments in the UK
Use credible finTech specialized in international payment
Traditional banks usually have high fees for international payments. Use FinTech solutions to bypass these high fees. Many FinTechs either waive transfer fees or charge a flat rate.
This also applies in the aspect of currency conversion. FinTechs, unlike banks, provide very competitive rates on currency conversion.
Another feather of FinTechs that help you save cost is the automation feature. When you use this feature, you reduce administrative costs. Human errors that could incur more costs are also reduced, thereby saving you money.
OhentPay is a great example of a FinTech for international business payments in the UK. The transfer fees are very low, and it has an inbuilt currency conversion tool that makes international payments easier for you.
In addition to all the advantages already explained, OhentPay also guarantees you utmost security so that your money is tightly secure.
Get a multi-currency bank account
A multi-currency account is an account that holds multiple currencies. In one account, you can have GBP, USD, EUR, NGN, GHS, AUD, and so on.
When you have a multi-currency account, there is little to no need for currency conversion. This drastically reduces the conversion fees you would have paid if you had the regular single currency account.
One notable feature of multi-currency accounts is that they make accounting simple. Because all the accounts are in one place, it is easy to reconcile your accounts and not have to bring different accounts together.
It is common knowledge that exchange rates fluctuate. However with a multi-currency account in place, you can hedge against these fluctuations.
There is the flexibility to convert funds when the rates are favorable and even exchange rates for future transactions.
Pay your suppliers in their currency
One of the ways to bypass conversion rates for international payments is to pay your suppliers in their local currency.
If you send a Nigerian supplier GBP instead of naira, you may think you are bypassing conversion fees. Instead, you are incurring more costs to yourself.
The Nigerian supplier would still need to convert this GBP you have sent into Naira. This will attract conversion fees on their end.
What happens is that they pass these fees to you as they won't want to run at a loss. They could pass it directly or indirectly by increasing the price.
But when you pay them in their currency, you can get competitive exchange rates by exploring specialized FinTechs like OhentPay. This way, you have control over the conversion process, as opposed to paying anything your supplier says.
Compare exchange rates among providers
Exchange Rates will usually vary depending on the provider. Start by researching different providers to find out the ones that meet your needs more.
Platforms like RemitAnalyst can help you compare if you don't want to do it or manually.
You also have the option of locking in exchange rates for your future transactions. It is called Forward Contracts and helps you lock in exchange rates that are favourable to you.
Use automation to reduce manual processing errors
Using automated payment systems can help you reduce human errors and extra costs incurred by these human errors.
Human errors are inevitable because humans are not programmed— machines are. And when these errors occur, they often incur extra costs. To reduce these errors and prevent extra costs, make use of automation.
Fintechs like OhentPay offer automation tools to help you maintain accuracy in your international business payments.
Do bulk payments
This is another trick you can use to cut international payments costs as UK business. Instead of making your payments in bits, pay at once so that the transfer fees are reduced.
For example, you have a supplier in the US. You will be transferring $30,000 to them in a period of 1 month.
You have planned to send it 6 times— meaning $5,000 for each time. If transfer fees are $20 for each transfer you make, you would be spending $120 by the time you are done with the 6 transfers.
But you could have simply sent the $30,000 to them at once and paid a one-off transfer fee of $20.
So, whenever possible, do bulk payments. They save you a lot of money.
Monitor exchange rates
Closely monitor exchange rates to know when they are favorable for your business. You can identify favourable rates and avoid unfavourable ones.
Monitoring also helps you to plan ahead since you are well-informed to anticipate potential rates fluctuations.
With this knowledge, you can adjust your payment schedules where there is need for adjustment.
As a business in the UK, there are many ways you can save on international business payments.
This post has explored 7 important ways to do this. International business payments can be stressful and expensive if you don't know how to do them right.
However, you do not have to go through all that hassle if you follow the information in this blog post.
From using credible FinTechs like OhentPay to closely monitoring exchange rates, you can have smooth international business payments.
Ready to enjoy cost-effective international payments? Download OhentPay today.
