Your business involves cross-border payments. What are the questions that you should ask your payments services provider about forex costs and security?
Most business-to-business (B2B) payments that cross national borders involve foreign exchange (forex) transactions. In other words, at some point in the process, one currency will be bought and another one will be sold.
This can be a costly process. Suppose your business is making a payment from your country X to one of your suppliers in country Y, where the currency is different. Usually, your bank and your supplier’s bank will not have long-standing relationships. This means that the payment will go through at least one correspondent bank which is known to both. Needless to say, the correspondent bank will charge a fee for handling the transaction – and that fee will usually be paid by you.
Worse, the bank that is handling the forex transaction will also be making money – effectively paid by your business – from that transaction. Bank’s buy and sell currencies in large quantities at the published mid-rates. When they provide a currency to a client, they will usually impose a margin, which may be as high as 1%. They may also charge other fees.
An obvious question to ask your payments services provider is: what are the costs of forex transactions? Safenetpay is not a bank. We do not have to operate through a network of correspondent banks. We have low overheads, and can impose much lower margins on forex transactions. As a rule of thumb, our forex charges are about one quarter of those of traditional banks.
Another hard question concerns security. If your business is involved with retailing, with thousands of customers (or more), there are many things that you can do to reduce the risks of cyber-crime. What are the precautions that your payments services provider is taking? At Safenetpay, our products comply with the toughest security standards globally. If you need help or advise, our experts are at your service at all time.
If you’re making cross-border payments on a regular basis, don’t be afraid to ask hard questions. Low and transparent forex costs and evidently high security standards are part of the excellent service which your business deserve.