A blog post of two halves.
What does holding your own currency account mean when it comes to the rates of exchange you can expect from your banking provider?
Frankly - absolutely nothing.
Unless you negotiate and push in precisely the same way as you might were you only operating with a GBP account and sending funds abroad you'll find yourself and your currency exchange margins no more favourable.
We wouldn't advise you to avail yourselves of your own foreign currency accounts unless it was operationally beneficial so to do.
Setting them up simply because you 'hope it might make international payments or currency exchange transactions more competitive or easier' is not sound because it actually does neither of those two things.
If you elected to disregard the rate of exchange applied to exchanges and movements of money between your EUR account and your GBP account (for example) then you might find it reassuring or even simple to watch funds move from one silo to another, but, just because they are held with the same institution does not mean you will get a more favourable rate or even a lower transaction fee.
You will still need to login to your online banking, input amounts and move the funds.
Our take on this is that if you're going to login to your online banking, you might as well send funds to us and let us pop them into your other currency account at a commercial rate. The actions involved are literally the same.
You can give us a quick 30 second call to place your order, then send us the funds and we take care of the rest, same day and costing you and your business significantly less.
Holding your own currency accounts is helpful for businesses who receive foreign currencies in from customers as well as send them out to suppliers.
If you're selling your wears overseas or, earning mainly in GBP but have to support a foreign currency payroll, then, holding a EUR or USD account as well as a GBP one is sensible. We can help you with this as we offer currency accounts for our clients, in their names and, if needed, local.
We encourage many businesses to hold a foreign currency 'float' and we actively advise business to avoid making a foreign currency exchange if they can...whilst that may seem odd for a broker, it is in the best interest of our clients' economy because they will always loose something on the rate spread when using a financial institution (whether that be a broker or a bank).
Some businesses choose to use our segregated client trust accounts to collect payments from clients and customers.
We can also arrange for your own virtual IBAN and SWIFT account so that you're invoicing from your own administered facility rather than our client collection account.
If you're considering expanding your sales activity abroad then speak with your broker about our custom named accounts.
Whilst your use of your own currency accounts will depend entirely on the sophistication of your accounting, banking and financial activities, our experts will tend to assert that your foreign currency activities won't be any less costly.
We'd be delighted to talk you through the improvements a commercial rate of exchange might afford you and how our prices and process can work seamlessly with our custom accounts. Furthermore we can make some sound and impartial introductions to a number of treasuring advisers and banking institutions who can help you expand your operation in the most profitable and scalable way.
0203 172 8193 | jamie.lesinski@primecappayments.com | www.primecappayments.com
@primecapbrokers