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  • #966853
    Ramps
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    My supplier wishes to be paid in USd. Truth is I have never sent money in this fashion before or had a need to convert AUD to USD. Can anyone just provide some basic options as to how someone can convert and then send moneys overseas in a safe and proper manner. Obviously doing so taking into account fees etc. Whats the best way of doing it? Can Anyone Help? Please!

    #1021512
    FletcherTax
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    May I suggest to pay via Paypal – safe, secure and converts into any currency you like.

    #1021513
    accstat
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    Hi Ramps,
    Depends a great deal on the size of the payment and method you wish to use.

    As a start a note on currency conversion. You can get a good idea of a current rate from the news, the paper or sites such as xe.com however these rates will not be the reality for international transfers. Companies involved in international transactions (banks, paypal etc) make profit by forex arbitrage, that is that they charge a different rate to buy a currency than to sell it. For example lets say a bank has two customers in line. One wanted to make a transfer of $100 USD to an international account. The second, is receiving $100 USD from an international account. Using today’s rate of 0.89 you would expect customer one to have a withdrawal of AUD$112.36 and the second a deposit of AUD$112.36. But the rates actually used will be the banks ITT Bank Spot Sell Rate and ITT Bank Spot Buy Rate respectively which are (today) 0.88 and 0.91 meaning the first customer will have a withdrawal of AUD$113.63 and the second a deposit of AUD$109.90, making the bank a profit of $3.37 (before all the fees they will charge). Ok so for $100 its not a big deal, but for larger transactions this discrepancy can lead to quite substantial differences to what you think you will get or pay and what you will actually get or pay in reality.

    Now to the actual transfer to your supplier.

    Here are some options:

    1. Bank Transfer (ITT: International Telegraphic Transfer): This will pay from your bank account to theirs. You will need to get some information from the supplier about not just their regular account number but also the international banking codes (e.g SWIFT, SORT & IBAN – region dependent). With this method you wont have to do any foreign exchange calculations as your bank will give you the option to send it in USD then make the exchange for you and withdraw the money from your account in AUD. Your bank will charge about $30 or so for this and all the suppliers bank will charge them about the same to receive it (which some suppliers will oncharge back to you). In terms of promptness it depends on where the money is going and can be anywhere from 3 to 15 business days.

    2. Payment Gateways. You could use PayPal, Payoneer or other similar services if the supplier is a registered user. You can use your credit card to make the transaction or if registered yourself have the funds drawn from your bank account. Generally these service use a currency converter so again you wont need to do the calculations yourself. It will be faster than a bank taking anywhere from instant to 2 days.

    3. Third Party Services such as Western Union. I’ll keep this part short: DON’T.

    Best of luck,
    James

    #1021514
    Ramps
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    What fantastic answers. Thats why I this site is fantastic. People can get great answers even to the simplest questions I suppose. I had done some research and was wondering whether I should open a foreign exchange account with my bank … anyway I want to thank you both for your answers in particular accstat.

    #1021515
    Accountix
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    Try calling your bank and tell them you want to do a international funds transfer. If you can supply them with the receiving banks details, for a fee they will sort it all out.

    Shane Holbeck – Accountix

    #1021516
    Steve_Minshall
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    Just one to share:

    I use a cool free Firefox add-on called dcurrency which updates and displays currency conversions from one currency of choice to 2 others. It gets its exchange rates from yahoo finance and displays them in the bottom corner of your status bar in the Firefox browser.

    1AUD currently = 0.8861USD, and 11.26 Ethiopian Barr
    so there you go.

    Just search on Dcurrency at the Firefox Add-ons site

    #1021517
    King
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    Knowing the size of your transfer will help. If it is largish sums like 20K, then keeping an eye on exchange rates like a hawk can save you money.

    We transfer via a bank, and as part of that we have a USD account. When the rates are attractive we put any spare money into it. See the rate at .88 at the moment, this has saved us over $1,000 on our next supplier payment.

    If you are only doing $1-2,000 then paypal is probably OK.

    #1021518
    Sheila
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    King, post: 25464 wrote:
    Knowing the size of your transfer will help. If it is largish sums like 20K, then keeping an eye on exchange rates like a hawk can save you money.

    We transfer via a bank, and as part of that we have a USD account. When the rates are attractive we put any spare money into it. See the rate at .88 at the moment, this has saved us over $1,000 on our next supplier payment.

    If you are only doing $1-2,000 then paypal is probably OK.

    Re paypal…I have used Paypal for the past 6 years as both a seller and a buyer using a variety of currencies. As previously quoted it is great for small amounts. You may pay a bit in fees but it is certainly easy to use and you don’t have to wory about trying to work out the currency conversions.I would recommend it for any small business starting out especially. I am not an accountant or anything similar. just someone who has sold online.

    cheers
    Sheila
    http://www.idoby2celebrants.com.au

    #1021519
    Jake@EmroyPrint
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    Steve_Minshall, post: 25434 wrote:
    Just one to share:

    I use a cool free Firefox add-on called dcurrency which updates and displays currency conversions from one currency of choice to 2 others. It gets its exchange rates from yahoo finance and displays them in the bottom corner of your status bar in the Firefox browser.

    1AUD currently = 0.8861USD, and 11.26 Ethiopian Barr
    so there you go.

    Just search on Dcurrency at the Firefox Add-ons site

    Firefox addons are great aren’t they? Theres an add-on for everything!

    #1021520
    Bruce Stewart
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    Ramps
    If you are going to have to be makign these payments often you might want to consider http://www.latitudegt.com

    Basically you verify your Aussie bank account that you use to fund the transaction and then they will convert the amount into USD and pay into your suppliers bank account. You get an online rate qoute at the time of transfer and you choose to accept it or not. No other fees.

    I like it because it seems to offer good rates compared to the big banks & PayPal and its done online in seconds. I didn’t have to pay any fees to sign up, you don’t need any upfront deposit etc – you only need to have funds ready when you want to trade.

    The downside is that it takes a little bit fo time from when you trade to when the converted funds actually hit your suppliers account – but that may be ok in your case.

    Check it out.

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