March, 11th 2017 | 4 min read

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Introduction - Currency rates for ecommerce

In the last several years, the financial services have been disrupted by the rise of many new players in the so-called “FinTech revolution”. These are financial tech start-ups which have moved into the space to compete with the traditional providers – the banks – in terms of providing services for the new global economy where money needs to move across borders securely, rapidly and at low cost. E-commerce has been a major driver of this, with services such as online payments and international money transfer being in high demand.

Banks have found themselves losing ground despite their long-standing reputations and their established infrastructure. Why? In many cases, the banking industry has been far too conservative and slow-moving in adapting to the new economic reality of just how interconnected the globe is now. And perhaps they have rested on their laurels a bit too much, hoping that customers will stick with them in spite of things like slow international transfer speeds and, opaque exchange rates, and high fees. But the fact is that using banks for international transfer is generally a poor choice for e-commerce merchants at the present time. This post will walk you through 4 things you need to consider when evaluating fintech solutions and searching for the best currency rates for your online store.

1. Level of service 

Consider that traditional money transfers (typicaly banks)  take around 3 business days to reach their destination. This is a glacial pace in today’s connected world, and it will end up costing any serious merchant money to be waiting that long. Especially when there are competitor services around who can reduce that half a week waiting time to anything from a day, to essentially instant transfers from some providers. 


2. Fee structures


Look at for what are effectively hidden fees built in with a highly disadvantageous exchange rate. For example, a bank may charge a fixed fee of, say, $20 to $50 for the transfer, but if you check an online exchange tool and subtract $50, hoping to receive that amount at the other end, you’ll be disappointed. What you will end up with is far less than that amount – the bank has applied its own rate to effectively charge extremely high fees. What you end up with can feel like going to the barber and getting an extremely close shave! Research has shown that banks offer the highest overall costs for transfers both by cash and electronically. 

When preparing to send money internationally, you are probably used to using a currency tool like or Google’s currency converter (pro tip: just type “100 USD to EUR” directly into Google) to find the latest mid-market rates. And then there is the uncertainty of not knowing how close to that rate you will actually get if you go through with your transfer. Will you come up short by 1%? Maybe 3%? Or more? You must always compare that “real rate of exchange” (the mid-market rate) found on a reputable online currency converter, with the sell rate of your supplier. And which financial services provider can give you a rate which even comes close to what you’ve seen of the mid-market rate? 

Fortunately, help is at hand in the form of independent companies and platforms who have innovated to give transparent fees and reasonable exchange rates. Companies with entirely new models of operation have arisen, for example, some which use a peer-to-peer transfer service. These non-bank providers charge an average of 0.9% on $10,000, as compared to the banks which charge four times that, or an eye-watering average of 3.6%. 

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3. average transaction size

One area where banks may have the advantage is in large transactions, over $500,000 or so. In these cases, their rates may well be competitive. But very few e-commerce merchants regularly send transfers of those amounts, so unless you have that kind of volume, it is almost certainly worth leaving the banks behind and considering a more agile provider firm as your solution. 

4. Credibility

Banks have been able to keep their dominance and maintain their high rates due to their perceived advantage of oversight by regulatory bodies and thus a high level of security. This credibility did take quite a battering in the financial crisis of a decade ago, which is what has allowed smaller innovators to move into the space. So is the “security” of transferring funds by bank still relevant? 

The fact is that hundreds of millions of people trust non-bank providers to handle billions of dollars of transactions every day, all done electronically, and in these service providers are in fact under the oversight of relevant regulatory bodies. For example, in the UK (long a center for innovation in the financial industry) the chief regulatory body, the FCA is recognized as working closely with FinTech financial solution providers. Other financial centers such as Hong King and Singapore also work closely with and oversee newer companies in order to help their now-important role in sending money seamlessly around the globe. This is not a matter that should be taken lightly. Make sure the solution you choose is under the oversight of a relevan regulatory body. If it is - you're probably in good hands. 

Conclusion - Best currency rates for ecommerce

Finding the best currency rates for your e-commerce business should be taken seriously enough to make your choice of service partner a major business decision. Significant savings not only places money in your pocket but is a big business advantage. We hope that with some informed investigation of the options available you avail your business activities of the best possible advantages, as keeping current in the disruptive world of financial technology innovation will go hand-in-hand with the expansion of an online business.


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