PayPal burst onto the e-commerce scene in 1998, and since then has grown to be one of the world’s top online payment systems. Businesses big and small accept PayPal and it is generally the first port of call for online traders when their customers are looking how to pay. However, the disadvantages of PayPal have been made clear. For example, merchant accounts can easily be frozen if something happens that PayPal considers out of the ordinary — receiving an abnormally large order, for example. PayPal might freeze the funds while it investigates, and your only remedy is online via online processes. Processes which can leave your business’ international activities frozen in time.
The main downside to using PayPal for international business, though, is the hefty fees it charges. Like any international wire transfer company, PayPal will take a cut of your money. But because they’re simple to use, and everyone has heard of them, businesses often take the loss on the chin. It’s worth it because everyone knows they’re reputable, right?
However, there are other options for international business, especially given the popularity of international trade in Australia.
PayPal works by slicing large chunks off your conversion fee, a little like a bank — although a bank is typically the most expensive way to send money abroad, because they take the current exchange rate and put their own, heavy margin on top of it before charging you a sender’s fee. The difference is that PayPal takes the cost from the overall fee, so it’s difficult for you to work out what the PayPal exchange rate is.
A good rule of thumb is to always be a little wary if the business you’re using to send money resists telling you what their currency exchange rate is. There’s no way of knowing if you’re getting a good rate, but if you were, wouldn’t that be a good selling point?
PayPal say that they use a ‘retail exchange rate’ set by ‘an outside financial institution’, and also say that a fair comparison for their rates are the foreign exchange rates quoted at airports. These are high even for tourists, so it doesn’t make sense to use those same rates as an international business.
AquireFX has a peer-to-peer currency network to move your money between countries, connecting your business with others who want to make a straight currency swap. Because we cut out banks and brokers our fees are much less than the average.
The exchange rate we provide is the midpoint between the buying price and the selling price of the two different currencies. We add a transaction fee based on how much money you’re converting to another currency, which means that we can provide the exchange rate that big businesses use. It’s not a method designed to confuse you with extra fees, and we encourage you to verify the rates we use via independent exchange rate data providers Bloomberg Markets or Google Finance.
We know that converting a lot of money requires trust, which is why we’ve made our conversion process so open and honest. We aim to help businesses like you without taking a huge cut the same way PayPal do, and to always work within our company values — to be ethical and honest and to ensure customer happiness, as well as celebrating diversity, ideas and solution within our team.