Should you allow customers to pay in FX?
Most companies prefer to bill and get paid in their currency rather than their customer’s currency. After all, you don’t have any use for someone else’s currency. And you certainly don’t want the hassle of opening foreign bank accounts. But that may not be what’s best for your business. Remember, billing in foreign currency is different than allowing payment in foreign currency. There are several reasons why you should allow your customers pay foreign currency. And doing so will get you your money faster, eliminate fees, simplifying reconciliation, and help you win more business! Overall it will improve your foreign receivables process. And thanks to technology, it doesn’t have to be hard.
Get paid faster
Payment can be slowed when your customer is forced to pay in a foreign currency. Funds coming from another country can take a minimum of 2 business days and as long as 6 business days. And that’s when they are properly instructed. Cross-border payments can go through as many as 4 banks which can slow payments. Domestic payments, however, can go from sender to beneficiary in a matter of minutes. Allowing your customers to pay in their currency could cut days or weeks off of the time it takes to receive your money.
Reduce fees for all
Cross border payments can often incur significant fees, many times hidden or undisclosed upfront. Fees can be as high as 7% at times or even more on small payments. Sometimes these fees are incurred by your customer and sometimes they are incurred by you as the beneficiary. Either way those fees are inflating the total cost of your product and making you less competitive against in-country competitors.
International wires can often pass through four banks from start to finish with each taking a small fee. Hidden fees from intermediary banks and uncertain exchange rates can result in short payments, making reconciliation more difficult. Too often this creates a headache for your accounting and treasury teams.
Win more business
You create an unnecessary obstacle for your international customers when you ask them to pay in your currency. In a competitive market, that obstacle could prevent you from winning more business. The global business landscape is more competitive each day. Technology has allowed you to reach customers in more places. Technology has also created solutions to allow you to easily provide local payment options for your customers. Allowing your customers to pay in their currency makes life easier for you both and saves everyone money.
And it doesn’t have to be hard
Getting paid in foreign currency doesn’t have to be hard. With PayRecs you can receive payment in over 35 different currencies. No new bank accounts required. No currency risk to manage and no technology to integrate. Sign-up today and you can be up and running in just a couple of days. It’s that easy.
And because we believe in total transparency, there are other great companies you should check out as well!
Like our friends at Transferwise! We love their transparency! It’s great for individuals and peer to peer transaction!
Or Flywire! An awesome platform for education or healthcare payments!
Also, you can talk to your bank and see what services they have available. Some will have really nice solutions. Others… well let’s just focus on the former.
So, should you allow customers to pay in FX?
Yes! Allow your customers pay in foreign currency!