One of the by-products of increasing adoption of e-payments across the US business landscape (despite the continued dominant but declining presence of checks), is that businesses become more aware of alternatives. Historically one of the most expensive payment transactions for businesses is cross border, since it has been fairly standard practice to utilize bank wire transfers, given a general lack of awareness or trust in alternatives. Person-to-person remittance has been the real money transfer cash cow, but certainly the Western Union Business Solutions acquisition of Travelex a few years back (essentially for the foreign currency invoiced payments expertise) and the recently announced Fleetcor intention to acquire Cambridge Global Payments help to reinforce the growing B2B profile in cross border.
The truth is that the main reason for the increasing popularity of the money transfer business lies in awareness. It’s not that the need for exchanging currency or sending it abroad has substantially picked up in the last few years, it’s the mere fact more and more clients are aware of the exorbitant fees they are paying banks to transfer money abroad, as well as corporate clients aware of the importance of foreign currency management for retail.
So this piece does a nice job of summarizing some of the service and process differences that businesses are recognizing and should entertain when considering usage of the money transfer capabilities. It also provides a list of ten tips that help potential users to differentiate between ‘fly-by-night’ operations versus the secure, high quality capabilities and safeguards that need to be considered when switching from a direct bank cross border payment method, one of which follows:
Using a foreign exchange provider rather than your bank requires funding the transfer before it goes through. You can do so by a debit card (smaller transfers) or move the funds to a segregated bank account (domestically).
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
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