Why Businesses Should Allow Customers to Pay in Foreign Currency
Should businesses 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 to pay in foreign currency, and doing so will get you your money faster and eliminate fees while simplifying reconciliation; ultimately helping you win more business! Overall accepting payments in foreign currency will improve your foreign receivables process. And, thanks to technology, it doesn’t have to be hard.
Accepting FX payments allows businesses to 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 also 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.
How Accepting FX payments can reduce fees for businesses and financial institutions
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 options.
Simplify FX reconciliation
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, who spend their time following up with you and your customers about the details of the transaction in order to reconcile it properly.
Win more business with international payments
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 globally where the landscape is more competitive each day. Technology has allowed you to reach customers in more places and 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.
How PayRecs simplifies international payments
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. There’s 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.
So, should you allow customers to pay in FX?
Yes! Allowing your customers to pay in foreign currency provides these benefits:
- Faster payments
- Easier reconciliation
- Reduced fees
- Increased competitiveness
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