Why International Payments Fees Are Important? If you’ve ever wondered how international payments work, then please keep reading on. It is important to understand how international payments work and how the fees for such payments are derived. On top of that, to comprehend the impact of the correspondence banking network (or payment routes) and currencies, and why this process can be complex sometimes. For businesses or individuals wishing to make international transactions, transaction fees might impact the final cost of such transactions and become a burden if these transactions are needed on a frequent basis. Another reason to understand those fees is that it will help reduce them. Using a well-established banking partner or payments specialist can save tonnes of money. They are going to use smart payment routing to avoid expensive correspondent banks and ultimately make the transactions cheaper. Understanding the International Payments Process By initiating a transaction to send money abroad, a complex system of reconciling and balancing between banks and financial institutions starts. For a bank to implement a cross-border transaction, it must have both currencies or exchange one currency for another in order to execute the payment. The bank will have a relationship with other banks to conduct a foreign transaction that is outside of their own network. Because of this, international payments involve more financial institutions than you can see. Here comes the term "correspondent banking. The correspondent bank will be used by a domestic bank to service such international payment requests from a client by leveraging the correspondent bank's payment routes, or in other words, banking relations. The correspondent bank will be holding different bank accounts with different banks nostro and vostro accounts . In general, banks in correspondent relationships will hold accounts for one another in order to transact internationally. Logically, if more institutions are involved in a transaction, there will be more fees. So choosing a provider or bank that manages its payment routes efficiently is important if you wish to save on fees. Currency Exchange for International Payments Most of the international payments will be conducted in foreign currency. For that reason, the currency exchanged is involved in the transaction and can be a huge part of the total cost. Moreover, it is reasonable to compare the exchange rate offered by your bank to a mid-market rate or a currency's current buy/sell value on the FX market. If this analysis is done correctly, it will reveal what margin is being charged by the bank for a simple currency exchange transaction. While banks get direct market access to foreign exchange, they pay mere fractions of a percentage for their own conversions. While end clients are being charged sometimes up to 2–3% for their conversions. One reason why independent payment platforms are more transparent and flexible is that they are focusing solely on delivering the best experience and cost-value ratio for payments and FX, while traditional banks have a variety of focuses or lack business development efforts to optimise in specific areas. How Do I Make International Payments? The natural question is how to make international payments and save money not only on sending the funds but also on the currency conversions. And why some payment specialists are able to offer those services cheaper. The best payment specialists will offer cross-border payments at lower costs by negotiating bulk deals with banks around the globe. Such providers are also able to offer clients greater flexibility, efficiency, and advice, besides the lower fees. On the foreign exchange part, some specialists are also getting very small fees for FX as they are buying in bulk. So their aggregate volumes are very high, and it makes sense for the prime broker to do wholesale business. To find a payments specialist that can provide cheap payments and currency conversion, you need to do some homework. We have an article on this topic here . Furthermore, we recommend our readers reach out to us to get a free consultation or a list of the best-in-class payment providers. How To Receive International Payments? Sometimes traditional banking accounts are not capable of receiving multi-currency payments. And it can cause some difficulties for businesses that have clients or partners overseas. A multi-currency solution via a single account is the best option for ALL international payments and currency exchanges that you or your business have. We can help you get named multi-currency accounts with top-tier institutions that will enable you to receive payments from across the globe in 40 different currencies and send payments in 50+ currencies to 170 countries. Reach out to us to learn more. Conclusion All in all, understanding how fees for international payments are derived and what the process looks like will help you save a great deal of money. We hope that this article was helpful!

Why Is Choosing a Reliable Payment Service Provider Important? If you’ve ever wondered how to choose the best payment service provider, then please keep reading. This guide will help you sort out the good ones and save a lot of money. Nowadays, there are plenty of payment service providers claiming to be award-winning, most trusted, and so on. But the truth is that the majority of them are not awarded, trusted, or even good at international money transfers. This is because they lack basic correspondent banking relations, have bad technology, or are undeveloped. Having a well-banked and technology-based payment service provider will improve your business operations and save a great deal of money. What Is a Good Payment Service Provider? [3 Tips] There are multiple ways to check the legitimacy and quality of any PSP available. Even more, there are many technical ways to do that. But it is not going to necessarily help the reader perform such technical analysis by So I have decided to look at this from a different angle. Here are a few quick tricks that will help everyone have a better understanding. 1. Management team First and foremost, it is important to check who is managing the company. You can easily look up the employees on LinkedIn . Moreover, you will be able to see the past experiences of the people who run the company. Also the number of all employees and how often they are changing. The key people should have relevant banking and payments experience along with a perfect reputation. Furthermore, because today's PSPs are highly technical, having a diverse developer team is advantageous.It also signals that you won’t have issues with the payment platform in the future. In a similar vein, you will be able to see where those people are located. This is useful when employees are based in one country but the EMI license is obtained in another. That should automatically raise some questions. For example, you want to open an account with a UK-licensed payment service provider, but all employees are based in Russia. Wouldn’t that look strange? 2. Media check-up . Media is a good tool to check for negative news on the particular PSP. Maybe this company had received a fine from the regulator for money laundering? Or maybe they were involved in some scandals? The negative light on company practices is a red flag. It is extremely important to work with reputable and transparent banking providers. 3. Payment routes . PSPs use other banks to route payments for their clients. So in many cases, your recipient will see the name of the bank that routed the payment. Now imagine the payment service provider is using a Russian or Latvian bank to route their payments. Your payment can be rejected by the recipient's bank. If your funds are going through high-risk countries, it isn’t great. So you should ask your payment provider who they bank with. And more importantly, where they keep your money. In other words, safeguard . A truly good payment service provider will partner with top-tier banks such as Barclays or Citi. On top of that, being a wholesale partner of a top-tier bank enables PSP to access a vast correspondent banking network. Such a partnership would also enable extremely good pricing capability, which is the key to competitiveness. What Is the Best Payment Service Provider? Having in mind all that was said, there are several good banking providers out there. Because each client is different, it all comes down to a unique business case.Epico Finance assists business owners in locating the best digital banks for their specific business operations and model. Reach out to us to get a list of banking platforms that are best for your business. We can also help you to: · Get EU or GB named IBANs for all payments and foreign exchange. · Introduce you to mass-payments by integrating via API or uploading an Excel spreadsheet. · Access to effective currency hedges · Exchange of currencies using reasonable and competitive pricing · A cost-effective solution for low-value international payments · Implement payment control and audit trails. · Get your best relationship managers ready to help find the best solution and answer your questions. Please do not hesitate to contact us for more information or account opening under better terms here . Conclusion There are numerous payment service providers on the market, but not all of them are of high quality. It is important to distinguish quality from tricky marketing campaigns. Use the three tips above and you will be able to distinguish quality payment firms.

3 Reasons Why Digital Bank Is Better Than Traditional Bank If you have ever wondered why you should choose a digital bank over a traditional bank, then please keep reading. We will look into advantages and disadvantages that will change your mind. With rapid innovation in the digital banking sector, businesses have to carefully consider and choose between a digital bank or a traditional bank. Some prefer the stability of old banking styles, while others like to be in the trend of digitalisation thus choosing online banking. Here are the reasons why this change is happening: 1. Digital banks are gaining traction due to the high degree of internet and mobile app usage. The technology has evolved, creating the everyday convenience of banking online via user-friendly digital banking platforms. Those platforms allow users to send and receive payments as well as track their financials and get personalised insights. The latter part is powered by artificial intelligence that is embedded in today’s digital banks. 2. Another reason is that digital banking solves both the attractiveness and functionality problems at once. For example, the amount of clicks it takes to open an account with a digital bank versus a traditional bank is incomparable. The online bank simplifies the functionality of daily banking operations by minimising the steps and time spent on the banking platform. On top of that, the digital bank offers an attractive user interface that does not scare users away but actually makes using the digital bank a fun experience. In addition, they create the comfort of using the necessary services from one's bedroom. 3. The price of services offered by a digital bank is significantly better than the ones offered by a traditional bank. The most popular consumer-focused online banks are selling their services at no cost, thus creating unprecedented price competition in the banking sector. This is not going to last for ever, but a digital bank will never be so expensive as a traditional bank is. For example, traditional banks still charge fees for account maintenance or card servicing, even though they make money from card schemes and invest users unused money balances in government bonds. What Is a Typical Traditional Bank? Traditional banks have been in business for hundreds of years and are very well present in local regions. Their services are well known among people because of their long history. Traditional banks also offer personalised services via their branches and solve problems on the spot. Their service scope is not limited to only payments or currency exchange; they are also able to offer loans, leases, insurance, investment products, and more. In other words, a traditional bank is an organisation with a local presence and a full banking service portfolio. It has less of a technological presence but a good understanding of the banking industry and lending money. What Are The Drawbacks Of Digital Banks And Traditional Banks? On the other hand, digital banking is a completely online service. In the event that a user has a problem that cannot be solved using standard customer support, getting help might cause headaches. On a positive note, digital players are getting banking licenses that by default offer funds insurance up to 100k euro. Even so, some still do not have such licenses, and users' funds are unprotected (but still safeguarded).The good news is that no online banks with EMI licenses have gone bankrupt thus far. Traditional bank clients need to go to branches, wait in lines, and deal with loads of paper work to get sometimes even the most basic services. In addition, a typical traditional bank hasn’t changed its pricing model and is often too expensive in comparison to the digital bank. Traditional banks are also slow to resolve customer issues or adapt to new trends. How To Get A Digital Bank Account You might be wondering how to get a digital bank account in Europe or the UK. The online registration process with a digital bank is fairly simple and straight-forward. It can be done without leaving the comfort of one's bedroom. Finding a good one might be a bit more difficult. That’s why we recommend checking out our tips on choosing the best digital bank or payments provider. Conclusion All in all, it comes down to reputation and physical presence versus technology and convenience. It is important to understand your own goals to make the right choice between the two. If you wish to save costs on your transactions and your valuable time and nerve, reach out to us to get a list of the best digital banks in the market.

What Are Mass Payments? If you want to learn how mass payments work and how to optimise your payment processes, please keep reading. Technology is disrupting the way businesses send payments. The focus of this article will be on how mass payments save man hours, reduce costs, and ease the process of making hundreds or thousands of payments to the relevant counter-parties. The Mass Payments solution gives you the ability to make payments at scale. So it works in the same way single payments work, but it supports automation and scale. The mass payments solution allows you to execute a payment in over 50 different currencies and to 120+ countries, including low-value channels. All this is done without having to maintain local currency accounts and from a single platform, in the same way you would be making a single payment. How Do Mass Payments Work? A good example is a fashion house that needs to make a thousand payments for payroll every month to a particular country in a particular currency. Rather than going in and making one thousand individual payments, there is an API connectivity or excel documents that can be exported from the accounting system with all relevant payment details (like IBAN, amounts, currency, etc.). So the company can drag and drop that excel document into the payments platform, and by doing so, they are automatically uploading a thousand payments into the platform, which are then performed in bulk. If a company has only GBP in their payments platform and payments are needed in GBP, USD, and EUR, the platform automatically exchanges currencies for these payments and executes them as it recognises which payments need to go via SEPA , SWIFT, or Faster Payments . This can also be done via an API connection, which is a very easy and straight-forward way. Another example where time can be saved would be supplier payments. A company that has hundreds or thousands of supplier payments can execute them in bulk the same way a fashion house executes its payroll payments by exporting an excel document from its accounting system or connecting via API. Mass Payments API The Mass Payments API brings all your payments together in one secure and efficient hub. Automation saves the payer time and improves productivity while ensuring better delivery to payees. The underlying technology allows the payer to respond quickly to client feedback and market needs. The API also supports local legislation to keep businesses compliant, with easy payment controls and audit trails. What Are the Benefits of Mass Payments? There are a number of different benefits of using mass payments besides saving time and money. Our advanced list of benefits below: Advanced Security - Mass Payments are protected by advanced encryption technologies with access restrictions and associated authentication steps. Sanction screening - the mass payments system is checking for suspicious payments and comparing them with black lists and agency data to prevent sanctions violations and keep the transaction flow smooth. Advanced Compliance - The mass payments solution is compliant with the latest international legislation to ensure that payments are never compromised and are always according to compliance standards. Scalability - with the help of cloud-based technology, a mass payments solution is ready to help your business scale. Cost-efficient - access to multiple wholesale liquidity providers via API ensures that the client is getting the most competitive rates and the best choice across the markets. Automatic Validation - All payments are delivered on time by automating country rules. The mass payments solution prevents returned payments because of the selected payment routes and upfront validated payment information. How To Get Mass Payments Solution? Getting a solution for mass payments is not hard. First and foremost, a digital bank account is required.The same provider that you set up your digital bank account with should be able to provide the mass payments solution. Reach out to us, and we will share a list of the best digital banking providers that support mass payments through robust payment corridors and will protect your financial data with encryption. Conclusion All in all, mass payments solutions are changing the way many companies send payments today. Whether they pay their suppliers, do payroll, or automate other functions of their businesses. Mass payments are an easy-to-use and easy-to-set-up solution that will benefit any business significantly.

What Is Corporate Foreign Exchange Exposure and Risk Management? If you’ve ever been wondering how foreign exchange risk management can benefit your business, then please keep reading. Foreign exchange rate fluctuations have an impact on business organisations that operate in the global economy.Their managers are exposed to them as well as their bottom lines. Corporate foreign exchange risk management is a set of rules that help protect the value of cash flows and currency assets or liabilities from adverse fluctuations of the exchange rate. In the real world, such risk management would be implemented using various hedging strategies and instruments that we are going to talk about now. What Are the Benefits of Foreign Exchange Risk Management? As discussed already, hedges are used by businesses to manage their currency risk exposure and isolate their bottom line from FX market volatility. By entering a financial contract to hedge currency risk, the business manager is effectively protecting the exchange rate against a specified amount of currency for a predetermined period of time. One of the benefits is that the FX mitigation strategy will provide certainty and the ability to better plan financials. This means that a fixed exchange rate for a certain period of time will allow the finance department to plan and prepare for that time in advance. This ultimately gives a control over business flows and potentially increases profitability. On top of that, another benefit of currency hedging is the protection from adverse FX market movements and improved company management. So the directors can accurately forecast and implement corporate strategies with great confidence that there won’t be any surprises in currency positions. And lastly, exchange rate protection is going to fix the value of the short- and mid-term assets of the company. This creates certainty over the balance sheet and business transactions that encompass those hedged assets. What Should You Consider Before Hedging Your FX Risks? When implementing a hedging strategy, it is important to weigh the benefits versus the cost of hedging or potentially missing the appreciation of the hedged currency. In a similar vein, there are a few questions to be considered before entering into any hedging transactions: What does your company want to achieve with one or another hedging transaction? It is important to have a clear goal that will help determine the right hedging tool and strategy. What is your company aiming to achieve with a selected hedging strategy? This question should help to determine the extent of the hedge. How can you cover the costs of the hedge? It is important to understand that the hedge has a price. And that should be calculated into the profit margin and properly forecasted. Nevertheless, adjusting the price for customers can have a direct impact on profitability. As well as incurring losses from currency depreciation. The balance has to be prudently measured. How feasible is it to forecast a company’s currency needs accurately? Usually, historical data should help forecast the currency needs of your business. This is needed in order to accurately size the hedging contracts, as, for example, forward contracts require you to commit to a certain amount for the set period. Is there a revenue stream that supports currency hedging requirements? Is not only the cost to pay for a hedging contract but also the margin requirement to cover. A provider is going to ask for an upfront deposit to secure the currency contract. Even further, is your business able to pay an extra deposit in case there is a significant move in the FX market? And lastly, will your business have funds to cover the maturing contract that is in the red? Hedging means locking in the currency value regardless of the movements of the FX market. And it is important to understand that currencies not only lose value but can also appreciate, which means funds will be needed to settle the contract with your provider. What Are the Foreign Exchange Risk Management Strategies? Let’s now move onto the types of hedging transactions. There are a few that your business can use, and it is important to understand the nature of each one of them, at least in general terms. But before that, a short review of the most common instruments used to implement those strategies: Forward contract. A forward contract is a type of transaction where two parties agree to exchange one currency for another at a pre-determined exchange rate and maturity date. Spot transaction. A spot transaction is a foreign exchange transaction with a T+2 settlement (settled in two days). Basically, two parties agree to exchange currencies at the current market rate (on the spot). FX vanilla options FX options give the right but not the obligation to exchange one currency for another at a pre-agreed exchange rate on a specific date in the future. FX options are usually used to hedge uncertain business cash flows. The premium for the option is paid upfront, and there are no extra costs or losses to cover besides the loss of the premium. Moreover, we are going to review several hedging strategies that can be implemented with the mentioned products. Before that, it is important to understand that hedging solutions should be consistent with the overall business strategy and should not be used as a form of speculation. Layered hedge. A layered hedge is a series of separate open forward contracts with different expiration dates to cover certain parts of a company’s FX risk over a certain period of time. A business manager might open new contracts every week or month for specific expiration dates in line with the overall financial forecasts, thus keeping the layered hedge. This strategy enables businesses to monitor and adjust to changes in FX risk exposure. Market orders. A "market order is an agreement to transact in a particular currency at the current moment. It can also be used to hedge by opening a position opposite the currency that is being hedged. If an EU-based company is expecting $1 million of cashflow in USD in two months, the market order is being executed by entering into a spot transaction to "buy" the EUR/USD’ pair. Such a trade will produce profits in cases of USD depreciation against EUR and losses in cases of USD appreciation against EUR. Long Put. This is an options strategy to protect businesses from a potential downside in a particular currency by having the right but not the obligation to exchange it at a predetermined exchange rate. There are more hedging strategies, but it comes down to a specific business need and cash flows. In order to have an appropriate hedging strategy, you should consult with a currency specialist or your FX and payments service provider. What Is the Best Foreign Exchange Risk Management Provider? We recommend to our clients licensed payment and FX specialists that have longstanding industry experience and top-tier banking partnerships to provide quality service. Please reach out to us to get a list of the best-in-class FX and payments platforms. The Epico Finance team is working with companies of all sizes and industries. We not only help by providing the tools that you need for your unique FX risk management strategy but also have a dedicated relationship manager that will help you assess all available options. Conclusion All in all, organisations that are active in multiple markets will have exposure to foreign exchange risks and should be ready to manage that risk appropriately. There are available tools and FX risk mitigation strategies that any business can implement.

Why Does Currency Fluctuate? If you’ve ever been wondering how to prepare for currency fluctuations and how they affect international trade, then please keep reading. The price of currencies fluctuates due to the ever-changing supply and demand in foreign exchange markets. There are people, companies, governments, and speculators making trades in the FX market every millisecond. In addition to the daily trading, there is another important factor—the interest rate set by central banks. If the interest rate increases, the value of the currency will also increase. This happens due to the international investors selling the domestic currency to buy foreign currency with higher interest rates. The investors are piling up the debt instruments that are going to offer a higher interest rate. This purchase of foreign currency increases demand, causing the currency's price to rise. Another important factor is politics and the overall strength of a country. If international players assume that the political system of a certain country is stable and its economy is thriving, that might support the price of its currency. How Can Currency Fluctuation Affect International Trade? The currency fluctuation can impact international trade both ways. Usually, when interest rates go down, businesses can borrow cheaper. Moreover, the currency then depreciates, making the price of exported goods lower. So the economy is stimulated and activity increases. This is called monetary policy . However, there is an opposite effect too. When currency prices appreciate, exported goods become more expensive, and thus economic activity slows down. To sum up, it is important to watch the general trend in interest rates set by central banks. This is the main driver for currency fluctuations in the long term. It is also important to observe the political environment and interest rates set by central banks. Significant changes in politics often trigger currency fluctuations. How To Prepare For Currency Fluctuations? Have you ever wondered about the timing when making payments internationally or looking to exchange foreign currency for your base currency? The FX market is hard to predict, and some events can trigger significant currency fluctuations that can materially affect your business. You should admit the fact of a volatile FX market and adjust accordingly, so it makes sense to transact globally or exchange domestically. Here are a few tips that might help you navigate those currency fluctuations: Set your profile. First of all, you should set your own profile in order to decide on an action plan. Questions to answer for yourself: · Are you time- or price-sensitive? Do you have a target date by which the money should be received or sent in foreign currency? · What is your risk tolerance? · How often do you transact in foreign currency? · What is the worst rate your business is prepared to exchange at? · What is more important, completing a transfer quickly or getting a better exchange rate? These questions will help you understand yourself better and have a clear goal. Set a goal. Having a clear goal will help you identify the right action plan and increase your confidence. You will be able to look up a currency chart on the internet and see where the rate is headed. If it is going up, you should act quickly; if it is going down, you should wait for a better rate. It is also important to follow market updates to see what the upcoming market events are that could trigger greater volatility in the market. If you are waiting for a better rate, maybe it is worthwhile to eliminate the risk factor and act prior to the market news? Make a plan. The FX market is rapid and hardly predictable, so being prepared can give you some confidence. Having a plan might help you not miss anything and act right away. · Create a price alert and be up-to-date with the price. · Have the available funds for the international payment in your multi-currency account so you can act right away and make the payment. · Plan for holidays and weekends so your cross-border payment does not get delayed. · You can save money on larger amounts of transactions. · Split the transfers if you are not sure about the current market rate. · Have a currency specialist consult with you. Does your provider offer a relationship manager as part of its service? Hedging. You can also effectively mitigate FX risks by implementing hedging into your overall payments and FX strategy. There are a lot of benefits to hedging, but it isn’t a simple process. We can help you by introducing you to the most frequently used hedging strategies, such as layered hedges, long puts, vanilla forwards, and others. Moreover, having a reliable banking partner is of key importance. Reach out to us to receive a list of the best banking solutions that fit your business or currency hedging needs. Conclusion All in all, currency fluctuations are an unavoidable part of free markets. The important steps are to set a goal according to your profile, have a plan, and hedge accordingly. We hope this guide will encourage you to manage your currency risks! If you would like to speak to us about bank account opening, payment, and FX optimisation, as well as other currency risk hedging topics, just drop us a message .

What is Deliverable Foreign Exchange? Deliverable foreign exchange is a term commonly used on an institutional level and less frequently on a corporate or consumer level. Term means a currency exchange with a cash settlement to the account. On an operational level, it looks as follows: the client initiates an exchange with a cash settlement to the account. This means that the provider will take, say, EUR and settle USD on the client's account. In between those two, the provider will be earning a spread (or a margin) on the transaction. Usually foreign exchange is settled on a T+2 basis, or two business days after the trade date. Some offshore currencies are settled on a T+1 basis, for example, USD/RUB. What Are First-to-First Party Payments? For some financial clients, deliverable FX settlement can be done only to the same bank account or a bank account that is in the name of the same client requesting the exchange. This is also called "first-party payment". Some financial clients will have such a requirement due to the risks of money laundering . This means that the client will be performing third-party payments with another provider after the cash settlement is done. In addition to this, some providers can require a list of correspondent banks to check the risks of money laundering, and this is called " standard settlement instructions" . So the provider will agree with the client prior to any transactions as to which banks will be used for the settlement of cash. Deliverable Foreign Exchange Provider Whether you’re paying your suppliers or employees around the world, buying assets overseas, or just looking to send money abroad, a trusted banking partner is always there to deliver the right solution for all your currency exchange needs. Our banking partners specialise in managing FX and payments for international companies. They are ready to fulfill any specific requirements and minimise the effect of currency fluctuations on clients bottom lines. If you are looking for deliverable foreign exchange services, reach out to us to get a list of the best-in-class foreign exchange service providers, and we will also help you get the best conditions. Conclusion Deliverable foreign exchange is simply currency conversion with a cash settlement to the account.

If you are wondering how to save money on international banking for your tourism or travel business, then keep reading as we are going to discuss the best ways to do it. Many tourism and travel companies have international payments or client exposure, which causes natural currency fluctuation risk that may affect their margins negatively. Any such business owner or finance manager should think of ways to minimise such risks and optimise international banking costs overall. Our Epico Finance professionals have helped many such companies optimise their international banking strategies, and we are going to share key tips with you in this article. Having More Than One Bank Account First and foremost, it is worth considering having more than one bank account. Usually, a local bank account is used for domestic operations in a local currency, such as paying taxes, rent, utilities, payroll, and more. However, the tourism and travel industries are cross-border intensive and require transacting internationally in at least several currencies. The most popular currencies are EUR, USD, GBP, AUD, NZD, CAD, and more exotic ones like TRY, ILS, AED, CZK, THB, SGD, and so on. Having such a vast currency exposure requires a platform and the capacity to manage all those payments in one or several places. Traditional domestic banks are not flexible in regards to currency exchange, receiving and sending payments in multiple currencies, or even allowing to fix currency rates with forward contracts. Therefore, additional multi-currency accounts are needed to have more capability to manage such payment flows. What Are the Most Common Types of Payments and Currency Exchange Operations in the Travel and Tourism Industry? Marketing Expense: In most cases, such marketing platforms as Google or Meta take local currency as payment for ads and pay per click. However, there are some other ways of marketing that might require the ability to pay in a foreign currency, for example, copywriting, backlinks, lesser-known marketing platforms like Digital Turbine, and others. Software expense: Some companies need to pay for their software infrastructure, such as AWS, Google Office, Microsoft, and many more. These payments are mostly in USD, which requires a currency exchange. Especially for bigger companies, it might be an opportunity to save thousands on such currency exchanges using an international digital bank. International Payroll: Some travel agencies or cruise travel providers operate in several countries that might involve cross-currency payroll and utility payments. Even though those branches might have local bank accounts, currency operations are usually centrally managed from the HQ. Pricing and budgeting: A lot of travel agencies prepare pricing plans and proposals for international partners that are used for 12 to 24 months. This creates a currency risk that might affect profit margins negatively in the case of currency fluctuations. In many cases, we have helped companies build a resilient currency rate fix that helped protect those margins for up to 24 months. An OTC FX forward is the perfect tool for that. Budgeting in general can be a difficult task if currency exposures are left unchecked. It is important to have at least partial currency hedges to have a sustainable budget for the next year. We partner with several digital banks that are currency specialists and can help build and execute an effective currency risk management strategy for travel or tourism businesses. Transportation costs: a big part of the travel and tourism business is transportation. Usually, cruises and flights are booked in USD. In some countries, local banks are struggling with the USD correspondence and exchanges because they lack top-tier banking partners such as JP Morgan or Goldman Sachs that could enable them to be competitive in the USD transactions. For this reason, we recommend using a digital bank that has strong partnerships with American banks and can provide narrow spreads for USD exchanges. Providing new destinations: quite often, tourism businesses or travel agencies are trying to offer clients new and attractive destinations such as Thailand, Australia, the Philippines, South Africa, Turkey, or others. In order to be able to price such travel attractively, it is important to have a reliable currency partner that can help save tons of money in local currency exchanges. A real-life example of a client case that we had recently: a travel agency was buying hotel stays and airport transfers in Turkey in bulk. Local partners were accepting only Turkish lira as payment. As the Turkish Lira was decreasing in value throughout 2022, we helped the client reduce the TRY exchange spread by 1%, which allowed them to save roughly 15.000 EUR on a yearly basis. In addition, we helped them reduce payment costs by 50% so they felt less strict about making monthly payments rather than quarterly and potentially saved on a currency value while it was dropping month to month. Connecting to Payment Gateways: There are many travel companies that sell their trips online and use payment gateways such as Stripe, WorldPay, and others. Payment gateways allow travel companies to sell their trips online and customers to book trips using their debit or credit cards. If trips are sold internationally, this automatically generates revenue in multiple currencies that requires a conversion. Some payment gateways offer currency conversion and settlement in local currency; however, this option is costly, as card schemes will take approximately 2-3% on such conversions. Travel companies can opt to receive settlements in multiple currencies to an already operating multi-currency account with a banking provider and convert those funds at much lower rates in the process, saving thousands. We have advised this strategy to several online travel businesses, and they are saving enormous amounts of money by simply taking settlement from the payment gateway to the bank account in multi-currencies. Each case is unique, and we take a close look at how we could help the client optimise their payment workflows or exchange operations by leveraging our banking partners networks. If you operate in the travel or tourism industry, do not hesitate to reach out to us for a free consultation and see how much you could save on international banking! Ability to send and receive multi-currency payments What is often overlooked is the ability to receive and send multi-currency payments within 24 hours. Traditional domestic banks do not develop their payment rails in such a manner because for them it is not important. On the other hand, digital banking providers can help companies in the travel and tourism industries receive payments from partners or clients in 30+ currencies and send payments in 50+ currencies to 170 countries via a single account. Such ability can help many companies perform business development and operations smoothly and without too much hassle. On top of that, we saved a huge amount on transaction costs. We do often advise clients to think about how their businesses could improve if they had little or no cost for multi-currency payment collection. Or sending small payments to partners internationally would be of significantly lower cost. And finally, many digital banks enable clients to make mass payments without the need to instruct individual payments separately, thus saving a lot of man hours in the operations department. Reach out to us to discuss payment flow optimisation solutions in a free consultation! Conclusion To conclude, there are many ways and types of transactions where businesses in the tourism and travel industries can save or optimise. Traditional domestic banks are better for local operations and payments, while international banking should be trusted for digitally specialised banking providers.

If you are wondering how to open a bank account for your shelf or offshore company without hassle, then please keep reading. Bank account opening for shelf or offshore companies is a difficult or almost impossible mission for anyone who is trying it or has tried it. It is due to the banking regulations and AML / KYC procedures that require analysts to check every single detail of a company, its activities, and especially UBOs. The source of wealth is also a question that doesn’t get ignored by traditional banks these days. Be prepared for several rounds of questions and additional document requests from the bank. In addition, a traditional bank will be understaffed and slow to process account opening applications for newly formed offshore companies or even existing ones. What Are the Alternatives for Traditional Banks in Offshore Jurisdictions? From our experience, it is much easier and faster to open an account for an offshore company with a PSP (Payments Service Provider). We have also written an article on How To Choose Payment Service Provider [Full Guide] PSPs are much quicker to respond to applications for account opening and, in general, easier to deal with. For example, on average, it will take two to three weeks to open an account for a shelf company or offshore company with Epico Finance payment partners. Moreover, these digital payment platforms will provide detailed questions and reasons for asking certain questions. The answers will be processed within several business days, while the relationship manager will do her best to assist clients with the progress and timelines. As payment and banking advisors, we do recommend to our clients and readers that they require a named virtual IBAN account instead of a pooled account in the name of the payment company. This will add clarity to your banking operations and your relationships with clients or suppliers, as they will be sending funds directly to you! Finally, alternative banking providers are much more flexible in terms of pricing payments and FX solutions. Our team has helped multiple clients achieve better conditions than what they have had with a traditional bank at an onshore company! What Documents Will You Need To Open An Account With A Payments Provider? As mentioned previously, payment providers usually ask for fewer documents than traditional banks. However, it is not a rule of thumb, as their compliance might want to dig deeper into the UBOs or source of wealth. Let’s talk about the basic package of documents needed to open a bank account with an alternative banking provider. -Registration form or online application -Identification of Directors and UBOs (holding more than 25% stake in the company): ID or passport; proof of address within 3 months (POA) -Proof of address for the company (within 3 months) -Company incorporation documents and statutes -Description of business activity and purpose of the account -In some instances, the CVs of the directors, or UBOs if they are private individuals, should be checked to see if they have experience in the business field that the company is set to operate. This is a starter package of documents that will be required with the account opening application or registration form. When the due diligence process starts, compliance analysts might require further information. And our job as advisors is to help prepare for these possible next due diligence steps and respond to them professionally without undermining the chances of account opening. Conclusion It is extremely hard to open a bank account for shelf or offshore companies in traditional banks these days. A viable alternative is digital banks or payment service providers that are more flexible and can support offshore companies to have access to worldwide payment systems. If you are looking to open an account for a shelf or offshore company, do not hesitate to contact us for a free consultation and a list of the best payment providers that we can introduce you to.

What is a Virtual IBAN? If you’ve ever wondered what a virtual IBAN is or how to get one, then please keep reading. A virtual IBAN is a form of bank account issued by a bank or electronic money institution that permits the account owner to receive or send payments. The virtual IBAN account will be redirected to a real bank account held by the EMI or issuing bank. How Does a Virtual IBAN Work? The increasing market share of online sales versus physical sales is driving the popularity of virtual IBANs.Also, the B2B Payments expanse across borders and currencies is setting the stage to capture more online sales. A virtual IBAN is a reference number given by the bank that allows payments to be routed to a bank account. Getting a virtual IBAN is an easy and quick online process for many international companies, and it can be used to make cross-border payments, streamline those payments, and comply with necessary requirements that span the B2B and eCommerce digital economies. For clients, a virtual IBAN is the same as a traditional IBAN account with a bank; once they proceed with a payment, the money will be received in a physical receiving party’s account linked to the virtual IBAN. Moreover, the virtual IBANs can be customised or even multiplied for a company or group of companies to match certain requirements. A virtual IBAN has the same facilities as a traditional IBAN but can be an effective tool to reduce payment fees. On top of that, a streamlined back-office process, a certain degree of automation via API, tailored pricing for each client, and much more can be achieved by simply banking online. For eCommerce businesses, where acquirers are asking for bank accounts able to collect settlements in at least a few currencies, this can be hard to obtain. Together with receiving B2B payments in multiple currencies, there are currency exchange or hedging needs that must be met in order to maintain healthy business operations. How to Get a Virtual IBAN A virtual IBAN is intended to create access to payment services without the cost and complexity of a traditional bank account, where administrative and reconciliation costs are high. You can get a digital bank account with virtual IBANs and all named benefits from an industry-leading payments specialist that Epico Finance works with. Reach out to us to get a list of the best providers on the market. Our payment partners are able to offer settlement accounts to merchants, financial institutions, international corporations, and SME’s. The Epico team has experience supporting various industries with international payments and foreign exchange solutions. You can find more information about our service offerings here . Moreover, there are a few things to consider before searching for and signing up with any virtual IBAN providers out there. Not all of them are equally good, and it is important to choose wisely as they are going to handle your money. In order to help, we have put together a list of tips for you in our article "How To Choose Payment Service Provider [Full Guide]" What Are The Pros And Cons Of A Virtual IBAN? The standard virtual IBAN is a phantom account for a normal bank account. This way, it is able to replicate having multiple accounts in various jurisdictions and currencies while only having one actual bank account. In addition, the owner of virtual IBANs is the same owner of the actual bank account, and payments are routed to the actual bank account. Moreover, virtual IBANs make the management of multiple currencies easier. Because each different currency can have its own virtual IBAN. Also, the owner of a virtual IBAN is able to receive different account statements for each virtual IBAN. On the other hand, virtual IBANs cannot replace real multi-currency accounts in different jurisdictions. If a customer or supplier wishes to transact within one country's borders, the virtual IBAN associated with an actual account in a different jurisdiction might not be able to assist. Conclusion All in all, a virtual IBAN is a cheap and quick solution for organisations doing business in multiple markets. It is easy to create, maintain, and account for.

What is a Payment Service Provider? PSP is a company operating under an EMI license and providing payment aggregation or cross-border payment services. PSPs operate via nostro accounts and rely on wholesale payment networks similar to those of traditional banks. What Should I Check When Choosing A Payment Service Provider? If you’ve ever been wondering how to choose the best payments service provider, then please keep reading. Here is a full guide that will help you select, analyse, and choose the best provider of all. There are plenty of payment service providers nowadays across various jurisdictions. They are all offering the same thing: multi-currency accounts. But not all are equally good, and it is important to choose wisely as they are going to handle your money. In order to help, we have put together a list of tips for you: Money safeguarding. Ask where the payments provider is safeguarding client funds (bank name, country, currencies). If it is a good payments provider, they will have bank accounts for safeguarding funds at top-tier banks such as Barclays, Citi, Deutsche, UBS, etc. If it is an unknown bank or high-risk country, avoid such a provider. Also check if client funds are segregated on your provider’s balance sheet. Regulation. It is important to check where the provider is licensed. If it is a small, less developed country, it implies risk. Also check if the provider has ever had a problem with the regulator. For example, if a particular PSP was fined by the regulator for money laundering practices, you should avoid it. Security. Review the overall platform security, authorisation tools, and encryption. There is an increasing number of fraud cases, even with banks. Modern hackers are using the security loopholes to wire out client funds. Exchange rates. Foreign exchange rates and payment fees are very important. The reason for anyone to choose a payment service provider over the traditional bank is to save money. Transaction fees should be transparent and sensible. In order to have better grounds for negotiation, provide your current pricing with the bank and ask for a reduction. It is the easiest and most constructive way of negotiation. For FX fees, it is important to check with current spot rate in the market in order to have an understanding of the spread being provided to your business. Do not forget to check with other providers as well, and again compare for the spot rate to see which one is more competitive. Payments technology. You should investigate the technological capabilities of the payments platform. Pay attention to login security, reporting functionality, and available audit trails. In addition, the ability to store beneficiary details is key so you don’t need to do repeated entries. Beneficiary email notifications is another good functionality allowing your payees to know that you have made a payment to them. A live feed FX rates and hedges will help you to determine when is the right time to enter a foreign exchange transaction. In case you are dealing with dozens of payments or exchanges per month, you may also check possibility to make mass-payments. Mass-payments solution will reduce the need for manual payments entry and reduce errors. In addition, ask about API for possible integration with your existing business infrastructure. FX portfolio. Check their full FX offering. Ask for a list of currencies they are able to execute payments and exchanges in, and hedge. A good provider should have more than 50 currencies available. Payments capability. It is important to know their full list of countries they can send payments to and list of currencies the platform is able to accept payments in. Not all providers can send funds to all destinations and in all currencies. Only a good provider will have a wide list of cross-border payment routes. Testimonials. Ask for clients testimonials and especially form a relevant industry. Any well-established payment service provider will have happy clients that can say a good word for them. How To Finding A Good Payment Service Provider? As mentioned earlier, there a plenty of providers. We suggest to look for one in the most banked countries, such as UK, Germany or The Netherlands. To save your time, we can recommend you payment providers that can fit your business. Do not hesitate to reach out to us for a free consultation. We have helped hundreds of companies worldwide to find the best payment and FX options based on their business operations specifics and payment destinations. Usual payments partner that we work with is able to: -Provide single multi-currency IBAN for all payments and foreign exchange -Ability to receive payments in 30+ different currencies -Ability to send payments in 50+ currencies to 120+ countries -Ability to make mass-payments by integrating via API or uploading an excel spreadsheet -Access to effective currency hedges -Exchange of currencies using reasonable and competitive pricing -Process automation via API integration -Cost-effective solution for low value international payments -Payment control and audit trails -Streamlined beneficiary management and compliance processes -Relationship manager ready to help finding best solution and answer questions Should You Keep Your Money With Payment Service Provider? Unlike with the bank, your money with PSP are not insured. Even though, payment service providers are required to safeguard client funds with a licensed bank overnight, this is not fully equal to insurance that banks have. Yes, a highly reputable PSP will be keeping client funds with Top Tier Bank. However, it is important to ask before account opening. Our payment partners safeguard client funds with banks such as JP Morgan, Goldman Sachs, Barclays, Citi, Lloyds and similar. We would recommend to use payment service provider only for the intended services, such as foreign exchange or cross-border payments. This would mean that we recommend to pre-fund the account with payments provider to exchange currency or make an international payment. Keeping money for a long time with PSP, unless it has excellent reputation, is not recommended. Conclusion All in all, we have covered the main things to consider before choosing a payment service provider. Hope this guide will help you in your selection process!

Why Are International Payments in USD So Difficult? If you have ever been wondering why international payments in USD are so difficult and expensive to make, we are going to explain it in this article. The U.S. dollar is a global currency, with more than 80% of worldwide foreign exchange transactions taking place in USD. There are several reasons for that: liquidity, accessibility, acceptability, and most importantly, the backing from the Federal Reserve of the United States ( FED ). The FED has an excellent reputation in global markets for safe and timely USD payment settlements. Also, all top-tier banks have offices in the U.S. and are able to settle on behalf of their international clients. The difficulty of transacting in USD comes from strict compliance and the USA Patriot Act . This is used both for achieving US foreign policy and anti-money laundering ( AML ). Financial crimes such as AML and anti-terrorism are hot topics for US regulators, especially after 9/11 . How Do International Payments in USD Work? Paying in USD internationally usually involves an additional correspondent bank in the routing of such payments. Every correspondent bank that touches the money takes a fee, and fees can accumulate and reduce the value of the original payment amount. Even more, the receiving bank can also apply a fee or exchange the original USD into a local currency. This is one of the reasons we recommend transacting in local currency if possible. In a similar vein, the international payments and settlements in USD are handled by Fedwire (the Federal Reserve of the United States), also known as the real-time gross settlement system of the central bank. Fedwire is an electronic funds transfer system used by financial institutions for USD transactions. Such transactions are initiated when the sending institution receives accurate transaction instructions (such as an ABA routing number , name, account number, etc.) from the receiving institution (usually a bank). This information is then submitted to the Fedwire system (FED), and once processed, FED will debit the funds from the sending bank's reserve account and credit the receiving bank's account. Such transfers get completed instantly or within one business day. In other words, the FED has significant control over all international payments in USD and is able to enforce U.S. AML policies (terrorist financing, for example) or political agendas (sanctions). Losing the ability to transact in USD is basically a hold on global trade for a country. Also meaning the U.S. has the leverage to enforce its policies, and that is why countries like Russia and China are looking for alternative currencies to transact globally. What Are The Alternatives To USD? Since 2016, the USD is no longer the single reserve currency in the world. It remains the king currency (the most prevalent), but the International Monetary Fund ( IMF ) introduced four other reserve currencies to the list: EUR, GBP, JPY, and Chinese Yuan. There are speculations that the 75-year USD dominance is coming to an end, even though the vast majority of transactions are still happening in USD. Besides that, there is a new term "de-dollarization,", where countries like China and Saudi Arabia agreed to use different currencies for their oil trade (the Chinese yuan, for example). Another alternative is gold. For example, Russia is increasing its gold reserves very rapidly. Very recently, Bitcoin and blockchain technology have been speculated about among politicians and prominent business people as a possible decentralised alternative to the USD. The idea of cryptocurrencies was always to ditch the use of fiat currencies. How to Make International Payments in USD Now that we have discussed the background of the USD as a currency, it is time to explain how one actually makes an international payment in the USD. First and foremost, if you wish to make an international payment in USD, you must have an account that supports the currency. Usually, it is a multi-currency account that is able to receive and send payments not only in USD but in a variety of other currencies. Secondly, you need to have USD in your account. That can be done by exchanging your local currency into USD. If you are using a multi-currency account, that should be an easy and straight-forward process. Thirdly, you will have to have all necessary payment details. If it is a business payment and in a larger amount than $100,000, you should also be ready to present the invoice or other type of document that will prove the legitimacy of such a transaction. Last but not least, a good digital bank will not only provide a multi-currency account but also a great variety of payment routes that will guarantee successful international payments in USD. It is important to understand that the payment service provider is the key here. That is why we are providing a first consultation free of charge for our clients, especially those who wish to optimise their payment flow or currency exchange. Feel free to contact us and get a list of the best payment and FX providers in the market. Conclusion On a microeconomics level, the USD is a difficult currency to deal with, especially because of high risk and anti-money laundering controls. Having a good payments partner will help you send international payments in USD seamlessly and without any problems. Contact us to get a list of the best payment providers for international payments in USD.