With the best money transfer companies, you can reduce currency exchange fees on your next business trip.
Business currency exchange services help employees access the money they need during international trips. However, accessing funds can come with foreign transaction fees and hidden charges if you’re not careful.
In this blog, we’ll explore the best cash, cards, and digital alternatives for work-related travel. Read on for tips on business exchange rates, business travel cards, and how to find the best money transfer companies.
Euros, pounds, dollars, or yen – when traveling abroad for work, you’ll need to be prepared for different currency rates and fluctuations. Whether you’re covering travel expenses with cash or corporate cards, the funds will be paid out in the local currency, at the current exchange rate. For example, if today’s GBP to USD exchange rate was 1.26, you’d receive $1.26 for every pound exchanged.
You can exchange cash either in person or online. In-person venues include airports, post offices, banks, hotels, and some travel agencies.
Business exchange rates vary slightly by provider. Many of the best money transfer companies operate online, allowing travelers to shop around for the best rates before ordering a lump sum for their trip.
For cash top-ups during your business travel, you can visit locations like:
Yes, in most cases you’ll need to show an ID (usually your passport) to exchange money. This is done to prevent money laundering.
Carrying large amounts of cash can be inconvenient and unwieldy, which is why many businesses prefer that employees use cards or money transfer apps instead. These make expenses easier to track and often offer favorable exchange rates by using real-time market figures.
International banking solutions like Wise, Revolut, and Airwallex are convenient tools for business travelers. These allow account holders to transfer and receive funds across borders, with remote management via the provider’s app.
With tools like these, you can create separate accounts for each supported foreign currency, transferring funds from one currency to another within the app at real-time exchange rates. This saves both time and money on the road.
Exchange rates don’t just move from one day to the next. The fluid and sometimes volatile foreign exchange market (Forex) means rates can fluctuate throughout the day, even minute by minute. Economic and political events influence exchange rates, as do factors including the time of year and demand.
The best money transfer companies use real-time exchange rates, and you can check online to see if you’re getting a good deal or not.
That depends on whether the rates are favorable at the time of exchange. If you’re exchanging cash, doing so ahead of time gives you more control over rates and fees.
However, if you’re using a digital money transfer tool like PayPal, Wise, or Revolut, you have more freedom over the timing of your transfer payments. Top up your home currency account with the allocated budget for your trip. Then, simply transfer funds between currency accounts as needed, keeping an eye on exchange rate fluctuations.
Visa and Mastercard are the world’s largest payment processing networks, which means your cards will work overseas with no need to exchange money in advance. Simply use the card as you would for expenses at home. You’ll also save on ATM withdrawal fees by using your business travel card for expenses, though it’s important to be aware of foreign transaction fees.
Planning ahead means you’ll be able to get the best currency exchange rates. This not only means shopping around to compare conversion rates, but also considering your timing to optimize the budgeting process.
Here are the main factors to consider when it comes to business currency exchange rates.
The foreign exchange market is driven by supply and demand. Peak travel times bring greater demand for travel money, especially to popular travel destinations. If you have a conference planned for the summer, consider exchanging currency a few months ahead to save. Similarly, exchange rates tend to be more favorable mid-week compared to peak weekend travel times.
Markets react to political changes, including during elections and times of social unrest. A country’s currency might fluctuate more widely post-election, then settle down after a few months.
Countries with higher levels of economic stability will have more predictable exchange rates. Everything from inflation to interest rates have a direct impact on a currency and its perceived value. Finance managers should keep an eye on the latest market trends to purchase pre-paid travel cards during stable periods.
In addition to watching market trends in your travel destination, consider the strength of your home country’s currency in comparison to your destination’s. For example, if you live in the US and the dollar is strong, you’ll have more buying power abroad.
Yes, there will be a fee to use these services, though the type and value will vary. Some providers charge a flat fee per transaction, while others charge a percentage of the total amount exchanged.
Currency conversion fees are separate from foreign transaction fees. These are charged by banks and credit card companies on any purchases made in foreign countries. These might apply when you:
There are several ways to minimize these costs. The first is to use digital wallets like Google Pay or Apple Pay for competitive transfer rates.
The second is to use online banking solutions like Revolut, which come with real-time exchange rates and unlimited account transfers when you sign up for a multi-currency business account.
If you’re exchanging cash, locations like airports and hotels are known to charge higher fees. Shop around to find the best deals, not only in terms of currency exchange rates, but also transaction fees.
Whether you’re using a money transfer app, a travel agent’s money exchange, or a business travel card, read the fine print first to check for hidden fees. For example, some card providers might charge an inactivity fee if you don’t use the funds.
As any finance team knows, planning with a detailed checklist and saving go hand in hand.
You won’t know how much currency needs to be exchanged without an accurate, detailed business travel budget. Use travel management tools like Tripeden.com for Business to compare the costs of flights, accommodations, and car rentals ahead of time, then think about per diem rates for meals and miscellaneous costs.
Many banks have currency exchange services for their corporate clients, offering lower fees as an incentive for bulk transactions. Consider outsourcing your currency needs to an account manager who can monitor market trends and get the best rates.
They’ll also be able to advise on digital offers, since many banks have apps for international money transfers.
You probably already use your phone for contactless payments at home, which work just as well abroad with foreign currency.
Here are the best apps to simplify currency exchange:
Prepaid corporate travel cards are a popular choice for businesses. You can issue prepaid business travel cards, loaded with enough money in the local currency to cover employees’ daily expenses. These can be used as any regular debit or credit card at ATMs, shops, and restaurants.
Because cards are purchased in advance, they have the benefit of a fixed exchange rate and greater spending control.
If the itinerary involves several destinations, multi-currency cards are a great option. Providers like Wise give separate currency wallets in a single account that can be topped up with euros, dollars, and other currencies as needed.
Credit cards are a convenient option for business travel because they’re widely accepted and secure. However, most come with foreign transaction fees on top of the standard conversion fee.
Foreign transaction fees typically cost 2% to 3% of your total purchase, which can inflate your business travel budget fast. At a rate of 3%, you’d be spending an additional $30 on top of every $1,000 allocated to travel expenses. This will leave you wondering how to avoid foreign transaction fees, if possible.
The best way to avoid them is with a fee-free credit card. Foreign transaction fees are charged by the payment processor, like Visa or Mastercard, but it’s the card issuer’s choice whether to pass this fee onto the consumer or not. Banks like Barclay’s, Wells Fargo, and Chase all have cards without foreign transaction fees. If you’re wondering how to avoid foreign transaction fees, just ask your bank or check a money comparison website.
You’re more likely to get the best exchange rate from an electronic payment card, particularly if you use a prepaid, fee-free option. Credit cards offer better security because they come with consumer protection, whereas cash comes with the risk of getting lost or stolen.
However, cash is still king in some countries. When cards aren’t accepted, you’ll need the local currency on hand to tip hotel staff, pay street vendors, and take taxis.
The best option is usually to take both. Use a corporate travel card for major expenses and cash for incidentals.
While we can safely say you’ll spend more at your hotel desk or airport, there’s no one-size-fits-all solution for currency exchange. Everything from the global economy to local elections can disrupt exchange rates.
By employing the strategies above, you can minimize costs for your organization. Take currency exchange rates, foreign exchange fees, per-transaction fees, and current market conditions into account. Use digital tools to compare options and work currency exchange costs into any budget for total control over business travel payments. With a combination of online banking apps, corporate travel cards, and local currencies, your team will be covered.
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