Local currency payments can seriously improve your business
Local currency payments are transactions by which the buyer pays a foreign partner in the partner’s currency instead of using his own currency. It is often thought that processing only your own functional currency is a good way of avoiding transactional risk in your business. The reality is that it can do more harm than good. You might lose potential business opportunities with those who do not wish to process payments in foreign currency and secondly, mark-ups applied by those who do not accept foreign currencies result in much higher costs for you.
Local currency payments - when is it worth using them?
If you are dealing with foreign market and especially if you are employing freelancers from all over the world, chances are you already know how sensitive and important this question is. You might assume that by paying foreign service providers in your own local currency you will eliminate the risk of exchange rate fluctuation and will save some money. However, it goes in quite the opposite way. No matter what, you will always deal with FX risk when processing international transaction, but if you leave it for the second party to deal with, you might face considerable drawbacks.
If suppliers are dealing with foreign currencies, they usually add a surcharge to their regular price to cover the potential loss in currency exchange and any fees attached to that. If you change your business processes to local currency payments, you will immediately be awarded with lower rates driving your costs down. You will also definitely have more partnerships and less occasions when your offers are turned down because of other more favourable solutions.
What solutions to use when paying in local currency?
If you are planning to go for local currency payments, you know you might be dealing with dozens different currencies, have to open local bank accounts, deal with various legal and regulatory issues and let it become a really expensive and time-consuming matter. Alternatively, you can find a better solution with SatchelPay and process local currency payments without going through the whole complicated process. Get in touch with us and we will have it all set up for you in no time. Let us help you to improve your business!
Also learn how to open a bank account abroad.