Selling internationally is now part and parcel of growing a business. In the past, we’ve written about how to process foreign currency payments for small businesses and what to look for when accepting international payments for ecommerce businesses. In this post, we’ll cover how multi-currency settlement in Australia works.
1. Sell in multiple currencies, settle in domestic currency
The most straightforward scenario is a business transacting in a foreign currency such as USD, with their payments provider converting into AUD for settlement. In this example, your transactions are converted from USD into AUD. This set up works well for companies starting to sell internationally with little need to hold funds in a foreign currency.
2. Pay suppliers in a foreign currency
As a business matures, it starts to make sense to keep your money in your preferred foreign currencies.
Referring back to our previous example, now fast forward a couple of years. Your business is growing, and you have overseas suppliers you work with that require payments in USD. It’s becoming increasingly expensive to convert your USD transactions into AUD and then convert them back into USD to pay your suppliers. You’re getting concerned with getting hit by conversion fees as well as being exposed to foreign exchange risk.
Ideally, you can hold the proceeds of your foreign transactions in USD, instead of receiving funds in AUD. Unfortunately, the majority of vendors do not offer this solution to merchants. Whilst they might allow you to transact in a selected number of foreign currencies, they will only settle into your AUD bank account.
3. Settle funds in a foreign currency without conversion
With a Pin Payments account, you can settle your transactions into a foreign currency bank account (including a Wise multi currency account). This gives you the ability to pay your suppliers from your foreign currency account without any currency conversion. This feature is useful for merchants like Koda Sail. With suppliers primarily based in Europe, it was vital for them to accept and settle transactions in Euros. This feature also gives you greater control over fluctuating exchange rates by allowing you to choose to convert to AUD when the foreign exchange rate is in your favour.
What is Wise?
Wise helps individuals and businesses open a borderless, international business account in minutes. With a Wise business account, you can send, spend, and receive multiple currencies with the real exchange rate.
Your recipient doesn't need a Wise account to receive their money. It's free to open a Wise account, and their pricing is transparent with no hidden fees.
Looking to accept multi-currency payments?
With Pin Payments, you can accept a range of foreign currencies. Sign up for a free account and take advantage of our world-class features. Set up takes less than 10 minutes, and you can start accepting payments within a few days. You don't need a web developer or technician – but if you need support, drop our friendly team a note.