Each year trading becomes more globalized. The amount of money moving across International borders continues to increase as businesses continue to enter foreign markets. International commerce used to be reserved for the titans of big business; however, the contemporary market offers friendly entry points for small business owners and entrepreneurs. Operating your business on an international scale means using some form of international transfer service. It is important for small business owners and entrepreneurs to use the most cost-effective options when they wire money abroad. If you are taking your company global, here are some things to consider.
Remittance and International Money Transfers
Remittance is the amount of money being transferred to someone abroad. There are a variety of methods from which remittance is sent; wire transfers, online transfers, and checks constitute just a few of the many ways you can get your money to your employees and family abroad. While remittance is a necessary part of running international businesses, it also has many economic implications- remittance is a big factor in the GDP of developing countries.
The Remittance Float and What it Means for Business Owners
If you have ever used an online transfer service to pay a friend, you have some familiarity with a remittance float. Typically when you pay someone or receive money through a payment service the money is not deposited in the desired account for at least one business day. The time it takes for a payment to move from the payer to the recipient and become accessible for use is known as the remittance float.
It is important for businesses to take steps to limit the remittance floats of their transactions. If you need to send money to Mexico, or receive money from a customer in Europe, you want the transaction to happen in a timely manner. When money takes a long time to be processed it limits the cash flow of your business and potential interest gains. Entrepreneurs and small businesses can limit the remittance float by using cost-effective and efficient options.
Options for International Transfers: The Bank vs. Remittance Companies
The most common options for sending money abroad are through a bank account or online transfer service.
Using the bank may seem efficient but is extremely costly and inefficient. Banks provide the option to send money through the portal of your business account; however, they charge a big fee for their middleman service and typically offer the worst exchange rate on the market.
Online remittance companies are the most cost-effective and efficient option for international transfers. These companies offer fair exchange rates and low fees; entrepreneurs can cut costs and increase financial savings from the smallest differences in rates and fees. These companies allow you to handle all your international business transactions from the comfort of your bed- all you need is an Internet connection. The convenience, security, and cost are all key advantages over going through a bank; the 24/7 service and speed of transfers enables entrepreneurs to do business on their own terms and time. Leveraging the benefits of these services allows entrepreneurs to be a step ahead of the competition.
The International marketplace offers an abundance of potential and promise for entrepreneurs and business owners. Taking your business global is an exciting process, but requires preparation and detail. Cutting costs is an essential task of the international entrepreneur and there is no better place to start than money transfers. Business owners should look for services that limit the remittance float of their transactions and offer fair exchange rates and fees. An online transfer service or remittance company is a great option for cutting the time and cost of your transactions without comprising security and convenience.
