By Stuart Gregory
Most of the five million UK SMEs do some form of international business[1] – whether that’s paying a supplier in Spain, working with a freelancer based in the US, or getting paid by overseas clients or customers. What’s more, three quarters of those that do overseas trade say going global has made their business more profitable[2].
Speaking to businesses that used TransferWise for international transfers, we found that many found their banks at best inadequate and at worst, unhelpful. Take Neil Walsh for example, co-founder of furniture agency Relay Designs. Neil and his company works with designers from all over Europe and when they secure a deal with a UK retailer, their client pays them in Euros. He said: “We didn’t have a European bank account so all of our income was coming into our British account. The exchange rate was constantly fluctuating and to top it off we were getting hit with crazy fees. On a €5000 commission we might only end up getting between £4000 and £4200. We never knew how much money was going to be left in the pot which made cashflow management really difficult.
“For the first couple of years we had to physically go into our bank branch to do an international transfer. There had to be a trained employee who handled international money transfers in branch on that specific day, there would be pages of paperwork and documents to provide and even then we had to wait for the money to arrive and get stung with a fee. It was like pulling teeth!”
It’s the same story for businesses paying workers and suppliers overseas – you’re charged an upfront fee by your bank, but land a terrible exchange rate which means the whole transaction costs much more. Sometimes the receiving bank will add an extra charge to accept an international payment, making it difficult to know how much money you’ll be left with.
We felt like there was something we could do to help and that business owners deserved better. So we’ve just launched the Borderless account. It’s a cross-currency account for businesses to receive and make payments around the world more easily and cheaply. But it helps people do more than just transfer money. It can help them manage their international finances completely differently, giving them more freedom and control with the same convenience, speed, transparency and low price point that know they need.
The Borderless Account is like having a local bank account in every country you need (we support 15 currencies with a separate account number for each), but with all the information in one place and without the cost and hassle of setting up and maintaining separate accounts. There are no set up fees, no monthly charges, it costs nothing to receive payments, and when you do move money across currencies, either within your own account or making a payment to somebody else, there’s a small transparent charge and you get the real mid-market rate exchange rate. Neil tells us how it’s given him peace of mind in a volatile currency exchange market. “To have a Borderless account and a euro balance at the click of a button is amazing. I never have to worry about fluctuations in exchange rates because I can hold money in both currencies – it’s simple and hassle free.”
Stuart Gregory, pictured above, is Head of Business at TransferWise
[1] researchbriefings.files.parliament.uk/documents/SN06152/SN06152.pdf
[2] YouGov, survey of 601 SME senior decision makers, 3-9 May 2016
