Optimising international business transactions with multiple service providers.
The growth of international money transfer services has created more ways to manage international currency transfers, but a lot of businesses may be under-utilising them.
Dependence on legacy accounting systems, or even just a habitual reliance on international bank transfers, can be a significant drain on your cash flow. With fintech entering the world of international business transfers in force, it might be time for you to start looking at upgrades.
Use the table below to compare dedicated money transfer providers for your business. You can customise the transfer amount to compare providers that will suit your transfer needs.
Instantly compare some of the best international money transfer services
The "Rate" and "Amount Received" displayed are indicative rates that have been supplied by each brand or gathered by Finder.
Exchange rates are volatile and change often. As a result, the exchange rate listed on Finder may vary to the actual exchange rate quoted for the brand. Please confirm the actual exchange rate and mention "Finder" before you commit to a brand.
The Australian Taxation Office (ATO) considers a corporation with an annual turnover of $250 million or more to be a large business. Businesses of any size will often need to send money across borders. However, large corporations, and multinationals in particular, have additional obligations, as well as opportunities in the form of transfer pricing, large forex investments and more.
Airwallex in 2017
Airwallex was created with the sole aim of finding the most cost-effective way to conduct any international money transfer, with a special focus on business transfers. Its foundation is machine learning software that re-calculates each transfer to find the optimal route.
In May 2017, this startup completed its series A funding with over $16m in investment. It’s active right now, with features including:
- Transfers at mid-market exchange rates: Quite possibly the best rates anywhere.
- Business APIs: API programming tools are available for businesses to let them create their own end-to-end international payment solutions. The APIs are developed on RESTful architecture, comprehensively documented, fully supported and specifically designed to be efficiently integrated into almost any system.
- Scaling fees: Fees are calculated in real time based on the current rates and the nature of the transfer. Intermediary fees are included in the calculation without any additional fees.
Airwallex exchanges take the form of spot trades, and current rates will be locked in when you schedule a transfer in advance.
None of the following information should be construed as financial advice. Instead, it’s simply intended to help you consider the possibilities offered by money transfer services beyond the banks, and to think about how you’ll start using them.
What to look for in a dedicated international money transfer service
There are now dozens of well-established international currency transfer services, and they’ll typically offer more competitive terms than bank transfers. Some features to look out for when your business needs to transfer money internationally are:
- Waived transfer fees: It’s relatively easy to find money transfer services that will waive transfer fees for certain transactions, or generally just don’t have any. However, check to ensure that they aren’t making up for this by offering lower exchange rates.
- Rate matching: It’s also common to find transfer services that will match or beat the exchange rates of their competitors
Features that may benefit large businesses and corporations
Some features to consider when your corporation is comparing money transfer services are as follows:
- Flexible worldwide destinations: You can send the money where it’s needed. Unlike most banks, money transfer services don’t typically maintain a strict list of destination countries. This is important for large corporations that may need to send money all over the world. Be sure to check each provider’s roster of destination countries when comparing money transfer services.
- Large transfer limits. Large corporations will typically need to transfer bigger amounts of money internationally. As such, it’s important to look for a money transfer provider that allows you to make large transfers. For example, some providers may not allow transfers over $50,000.
- No fees or set transfer fees. Some providers will charge a percentage based transfer fee, meaning the larger the amount you transfer, the higher the fee. For large corporations that typically need to make regular, large transfers, this can be quite expensive. Instead, look for a provider that charges a set fee or no fees.
Compared to banks, many money transfer services offer similarly customised and secure services, such as:
- Different transfer options: For example, single or recurring payments.
- Limit orders: To execute trades at a pre-set rate.
- Forward contracts: For locking in the current exchange rates.
- Advice: Specialised advice, focused on your transfer needs. If transfer services are providing tailored financial advice, their agents will usually be as qualified as bank advisers, in line with Australia’s strict standards.
However, more flexible or non-standard solutions might be a lot harder to replace. As such, it might be worth re-assessing the value of individual services as you bring in newer methods, and integrate them with the old.Back to top
Are money transfers safe?
Yes. Money transfer providers in Australia, such as OFX, are regulated by The Australian Securities and Investments Commission (ASIC) and need a Financial Service License, just like a traditional bank or financial institution. When selecting a money transfer provider for your business, it’s important to check whether the provider has a current Financial Service Licence. This should be clear on the provider's website.
Money transfer providers will also verify the identity of all users prior to completing a transfer, to protect against fraud and money laundering. It’s an industry standard for money transfer providers to have a Secure Socket Layer (SSL) Encryption on their platform as a minimum, which creates a secure connection with your browser and monitors for suspicious activity.
The advantages of bank services
Banks might be able to offer a wider breadth of services. For example, banks can usually make available forward contracts to hedge against currency fluctuations, along with bank-exclusive investment products that pay dividends into foreign currency business savings accounts.
Bank advisers naturally tend to have a thorough understanding of their own products, which can help them identify solutions that someone outside the particular bank might not be able to find.
However, as time passes, it might become more cost-effective to move some services in-house, while looking outside for specialized solutions, as needed.
For example, a business might look at nailing down a longer-term investment strategy with outside help, and then taking advantage of the Airwallex APIs to help carry it out and keep up with everyday needs like cash repatriation and overseas business expenses.Back to top
Money transfers for large businesses in summary
The next step is for you to use the table above to compare money transfer providers. Click through the providers to source up-to-date quotes before making your decision.
The rapid growth of fintech providers like Airwallex, and the wide range of exceptionally competitive international money transfer services, means that all businesses should be constantly re-evaluating their international currency processes. These types of providers can offer up many of the same services as banks, in addition to obvious savings from much more competitive exchange rates and reduced fees.
Automation can also go a long way to reducing the costs, and as time passes it’s more likely that seeking out advisory services on a case-by-case basis, or bringing it in house, might be a much better use of resources.
While the banks will naturally have to keep playing a central role in your operations, it may be worth looking further ahead, carefully re-evaluating your arrangements going forward, and looking for the flexibility to use alternative services where needed.