If your business serves a global market, Prince Ghuman says you might be losing money unnecessarily on exchange rates and bank fees. And if you sell to overseas customers on Amazon or eBay, or use PayPal to accept or make payments, he’s almost certain you are.
Ghuman is Global Director of Enterprise at USForex, the currency brokerage that helps small and midsize businesses to better leverage the strength of the U.S. dollar in dealings with overseas customers and suppliers. Hitting record highs against world currencies, at the time our interview the dollar was worth more in Sydney, Singapore, and London than it had been for more than seven years. With its own banking network, Ghuman says USForex enables tens of billions of dollars in transactions annually and saves customers the costs of wire transfers and bank fees.
For instance, to pay a supplier in China with a wire transfer, he says, “You walk into a bank, pay them the amount you need to send, then pay their fee — 3-5% plus a wire fee — then the bank sends the money to the bank overseas that will pay your supplier in the local currency. All these banks take cuts. Every time someone touches your money you’re being charged a fee, and that adds up.”
Relying on USForex instead, he says, “A U.S. chocolatier that wants to pay its supplier in Switzerland would make the payment into our American bank account, and we pay out from our Swiss bank to your supplier. There aren’t any other banks involved and there are no transfer fees for transactions greater than $5,000.”
Smaller transactions incur a $5 charge, while transactions range from just a few hundred to hundreds of millions of dollars, the average is above $24,000, he says. USForex makes its money in what Ghuman says are competitive exchange rate markups.
USForex also caters to the stretched-too-thin SMB leader, he says. “Sometimes you wear 12 different hats and you wait till last minute to pay an invoice, vendor, or overseas development team. If you have to make that payment on Saturday night or Sunday morning, we’re the only one who can help you.”
His message to the small business community: “Any time you’re making payment across borders you’re exposed to risk. Don’t assume that you’re on your own. We are the partner to handle your international - foreign currency risk.”
USForex parent company OFX is set to launch a product that has been in beta since January that is geared toward retailers that sell on eBay and Amazon.
“Fulfillment by Amazon is amazing; it’s making success stories of a lot of small businesses,” by giving them a warehouse, Ghuman says. “But the devil is in the details,” he adds. “As an American business person, I don’t have an Australian bank account, so Amazon is taking my customers’ Aussie dollars and bringing them over to my bank account. They take a 3.5 percent cut on top of their selling fees, which can be up to 20 percent depending on volume.”
Users of the new OFX product for e-sellers will instead benefit from the brokerage’s expansive banking network as if they do have their own bank accounts all over the world. “We’re able to collect local currency and pay out into your account in US dollars,” Ghuman says, sending that 3.5 percent savings back to your bottom line. It adds up.