Primarily, there are two reason why businesses incur such expense.
Firstly, exotic emerging market currencies are typically more volatile than major currencies. Exchange rates for such currencies are generally thought to be more susceptible to rapid change and fluctuation.
Put simply, if an adverse change in exchange rates occurs, businesses making payments in and out of emerging markets can see costs quickly spiral.
The second major cause of expense can be found in the lack of awareness of alternative payment providers.
Most organisations making overseas payments, especially to emerging markets, will typically do so using traditional banking institutions. This is where things become most expensive, time consuming and stressful.
Using banks and other traditional providers means having to navigate a complex minefield of red-tape and bureaucracy. Combined with this are high fees and charges, made deliberately non transparent.
Whether making payments to or from emerging markets, banks and other traditional providers will charge large transaction fees as standard. Transfer speed is also extremely slow. Payments to emerging markets can often take a week or more to arrive, something unacceptable in today’s global economy.
Bank exchange rates too, are extremely poor. When dealing with exotic currencies, expect a quote 4 – 12% worse than the actual inter-bank exchange rate. Conversion costs on the execution of a foreign transaction are also very low. As such, exotic international payments are a profitable revenue stream for a banks, with little incentive to pass on the gains to their clients.
Ten years ago businesses engaged in emerging markets would have found these barriers near impossible to overcome. Thankfully things have progressed greatly. Businesses now no longer have to be held ransom to the expense of banks.
The Kwanji platform was created for this very reason, making emerging market trade fairer and accessible to all. Businesses can pay suppliers or move money between accounts and currencies with ease and without unfair cost.
Free and easy to use, businesses can compare a range of quotes in seconds from a panel of large, established foreign exchange brokers, unlocking immediate savings compared to that of traditional banks.
Kwanji also protects from the risk of currency volatility, by always securing the best value rate. As well as this, Kwanji’s relationship team are emerging market specialists. Matching a personalised, bespoke support system with local insight and knowledge.
So if you’re tired of the prohibitive outdated costs of emerging market trade, why not head over to Kwanji and start comparing the best FX rates today?
Kwanji only use FCA regulated forex brokers to provide you the best rates and safest service. Protect your capital today and sign up to the Kwanji platform…. We’re also up to 95% cheaper than banks!
Sign-up now to grow your business internationally.