Tampa, United States, July 18,2019- For small and medium businesses with vendors around the world, a key challenge is how to send payments both efficiently and cost-effectively.

One major factor that influences the amount of time and cost of global business payments is whether you transfer money in US dollars or in your vendor’s local currency.

Here are 5 reasons to send wire global payments in local currencies rather than in US dollars.

Speed of payments

When you pay your foreign vendor in US dollars, your funds have to be converted. This is usually done by your foreign vendor’s bank. When some other institution is converting the funds, payments may take longer to reach your vendor’s bank account. However, when you send money in local currency, intermediaries are fewer and delivery is streamlined which means your clients’ beneficiaries receive funds faster.

Favorable exchange rates

If payments to your international vendor’s bank are sent in US dollars, their bank automatically converts funds to the local currency. Your vendor may not have negotiating power with their bank which may mean poor exchange rates. However, when you pay in local currency, you can compare the rates in advance and select the best option.

Exchange rate certainty

When you pay in US dollars, the value of payment at approval, and at the time it lands in your vendor’s bank account, can be different due to fluctuating exchange rates. However, when you pay in local currency, the rate of exchange and cost are calculated upfront, ensuring that the full amount goes to your beneficiary.

Avoid hidden fees

Often, when payments are made in US dollars, vendors cannot control whether intermediary banks will be involved in delivering funds. Lifting fees are charged whenever an intermediary bank is involved in facilitating the transaction. This makes vendors further increase their invoice to offset any additional fees. By sending payments in foreign currency, you may be able to reduce overall payment costs.

Account reconciliation

If your vendor’s accounts receivable ledger is in euros, their reconciliation team may find it difficult to match your US dollar payment credit because the converted euro amount won’t match the amount on the invoice. It is much easier to match credits to invoices in local currency, for example, 100 to an exact 100 payment versus $116.35 (as per the previous exchange rate).

Regardless of whether your invoices are in US dollars or foreign currencies, you can save more time and money by paying international vendors in their local currency.

If you want to buy and sell foreign currency in Florida, call Florida Currency Exchange at 813-280-9999. At Florida currency exchange service, we offer you the best exchange rates in the area and if you find a lower rate within 100 miles of their locations, we will match it!