There are all manner of elaborate ways for big businesses to inject stunningly convoluted mechanisms for multiple payments associated with payroll, top-ups and other batch or bulk transmissions.
Annoyingly for small businesses it always tends to cost more than it should and take up a fair bit of time, particularly when the recipient is abroad.
So, in this simple and quick post we will give two examples of clients of ours who make use of us to send multiple payments. We'll explain how we can bring the cost down and how we can speed up the process for businesses of all sizes.
One of our clients is a translation business.
They pay free lancers abroad for their services; ad hoc and varying amounts.
Their services are charged in GBP and so our client pays the free lancer in GBP. There is no currency exchange involved for our client and the exposure (the effect of movements in the rate of exchange) is carried by our client's recipient(s).
We could serve as the currency broker for the recipient, but, this is not the focus of our post today.
Why would a UK business use a payments provider to send sterling abroad?
The simple reason is because our bank charges us less to send a payment abroad than they do a business whose core activity is not payments.
We can achieve wholesale pricing on payments we make.
Provided we then charge our client less than their bank, our client makes a saving on that payment cost.
If HSBC charge £16 to send funds abroad and we only charge £10, then our client saves £6, obviously.
This may not seem like much if the payment is infrequent, but, the client in question usually sends about 100-120 payments a month.
Therefore we are saving them a minimum of £600 a month.
Furthermore, were they to use their bank, each payment would need to be input manually and released accordingly.
With our simple online system our client can send us all the GBP they wish to transmit - instantly and for free as it would be a domestic GBP 'Faster Payment' - and once logged in to our system they just select who they want to pay from a pre-loaded menu, how much they wish to send and when they want for the payment to arrive.
This is a tremendously convenient feature and leverages the smart tech focus of our system to speed up the process of inputting all those payments.
What's more, the client can pre-book for a payment to go out on a particular date.
So, whomever it is in accounts can sit down on a Monday and create all of the payments they want to go out on the following Thursday.
The only thing they need to do is make sure the GBP total is with us on Thursday, if not before, so that we have something to send for them.
Every payment is then searchable on our system and easily identifiable.
Unlike with their online banking, the client can even search by beneficiary. So, they can easily and quickly identify when they last paid a certain free lancer, the sate on which the payment left us and the time it should have taken for the money to arrive at the other end.
It is a simple matter of fact - online banking services, in their current form, do not do this.
Where there is a foreign currency element to the instruction, our client can login at any time and buy the foreign currency needed.
They might chose to do this when they consider the rate to be at a favourable level; or, in fact, if they are keen to pre-empt what they fear might be a drop in the rate.
Our system allows businesses to act when they want to and because of the emphasis we place on product selection, they don't need to pay us until the actual payments need to be sent.
One of our clients imports sophisticated furnishings from numerous suppliers across EMEA.
Usually these items are priced/invoiced in US dollar.
So, once they know who they need to pay and what amount should be sent, our client buys the total US sum they require.
They can then login to 'draw down' from that pre-paid USD pot.
They can do this months before the payment needs to be sent if they wish (and provided their are sufficiently liquid).
Again, in this instance our client's bank charges them £27 just to make an international payment to their suppliers.
We can cut this cost by nearly two thirds and improve their rate of exchange too.
So, whilst we hawk ourselves out as currency brokers, we are also a businesses that can speed up the time spent inputting payments and reduce the cost of those payments too.
All of this is part of the service and comes at no extra cost to our customers.
If you would like to become a Prime Cap client we invite you to give us a call on 0203 172 8193. Alternatively you can apply to become a client directly HERE.