At WhiteLabelDating.com, we operate across seven different international territories and that means that you, our partners, are generating revenues in a number of different currencies. In this blog, the WhiteLabelDating.com finance team share just a few nuggets of advice on better managing exchange rates and reducing transaction costs so that you can optimise your return on investment.
At times during the last 12 months, there have been significant fluctuations in exchange rates, particularly in some of the currencies that we deal with at WLD. In order for your revenues to remain as consistent as possible, it’s important that you keep an eye on exchange rate movements so that you can manage your budgets effectively. It’s vital that you maintain an awareness of when certain expenditure, in certain currencies, may cost you more.
Here are some best practice guidelines on managing currency exchange:
How to manage exchange rate fluctuation
Watch the markets. Most banks and currency brokers publish daily and weekly currency reports. These are free to subscribe and will give you a feel for the way the markets are behaving.
Match income and expense. Maintain an awareness of the currency that every part of your income and expenditure is acquired and paid in on. Try to match them where possible; for example, if you make $1000, ensure that you’re spending $1000 dollars on acquisition, rather than $700 and 300ZAR. This will reduce your need to translate currency, and removes the risk of any ‘naturally hedged’ amounts that may not equate to the same value in a different currency.
Shop around for the best exchange deals. Get quotes on exchange rates both from currency brokers and your bank. Be sure to take advantage of any introductory rates, like 0% exchange commission, that may be on offer.
Plan ahead. If you make regular transactions with the same currency pairs, discuss an ongoing exchange rate contract with your bank or currency broker to get the best deal.
How to reduce transactions costs
Currency accounts. Consider having individual (or different) currency accounts in place with your bank. This will allow you to manage different currencies effectively by letting you choose when to buy or sell your currency to achieve the best (or least expensive) exchange rate. If you let your bank do it for you, it could be expensive and you could incur excessive exchange rate charges.
Bank charges. Make sure you understand your fee structure. New banking rules came into force in September 2013 that mean it’s now relatively easy to change banks. Some banks have far better currency exchange rates and currency account offerings than others; shop around. It may be worth thinking about switching if you aren’t getting the best value from your current bank.
Larger values get better rates. Plan ahead when buying or selling currency; don’t just do it off the cuff. Plan to make fewer, but larger, transactions.
Local payment services. Think about using services like WorldPay Alternative Payments to reduce the cost of making international payments. These services utilise a network of local banks to reduce the cost of making individual payments considerably.
As we’ve already mentioned, exchange rates do change; they may go up or down at any time. The simple steps listed above are just some of the ways that you can manage these natural fluctuations more efficiently, hopefully making you more money!
If you’re unsure about which steps are most relevant to you, consider speaking to an independent financial advisor who will be able to provide you with detailed advice tailored to your individual needs.