Do you get nervous when you consider expanding your ecommerce business into an international marketplace due to the headache of understanding currency? While foreign currencies can be confusing at times – there is no need to fear them!
Just like a lot of ecommerce concepts – you’ve got to learn foreign currencies work to remove those fears. Thankfully, Kevin had the opportunity to sit down with Payoneer’s Strategic Partnerships Manager, TJ Hyland to unpack the complexities of foreign currencies for sellers like you. You’ll want to have pen and paper handy as TJ provides his helpful perspective on this often confusing topic. Don’t miss it!Discover how to maximize #ForeignCurrencies on this helpful episode of Maximizing #Ecommerce with @Payoneer’s TJ Hyland - you don’t want to miss it! #Entrepreneurship Click To Tweet
Outline of This Episode
- [0:20] Kevin introduces this episode of the podcast.
- [3:15] TJ Hyland joins Kevin to discuss maximizing foreign currency.
- [4:40] What causes the value of a currency to fluctuate?
- [7:30] Should ecommerce sellers be worried about the value of various currencies?
- [11:00] What is the interbank rate?
- [13:30] How Payoneer can help ecommerce sellers like you.
- [20:00] What you can do to maximize your currency exchange rates.
- [23:30] Closing thoughts from Kevin.
How does currency work?
How exactly does currency work? Who sets it, and why does it fluctuate? Understanding currency is vital for sellers to take a confident step into the international marketplace. Currency and currency exchange rates are set by a mixture of government and market parameters. The stronger a country’s economy and standing in the world – the more weight that currency has in the international marketplace.
Currency exchange rates use to fluctuate when government economic data would take a positive or negative turn. Recently – over the last couple of years – currency exchange rates have taken a more unpredictable pattern. Not only does global economic news impact a currency exchange rate, but social changes can influence them as well.
Don’t stress about the currency exchange rates
While it may be tempting to speculate and stress about the currency exchange rates – TJ Hyland says that approach is unproductive. Exchange rates may fluctuate between 15% and 20% in the countries that you operate in – don’t stress about it – eventually, they will stabilize.
Bottom line – keep an eye on the economic and social news coming out of the country you are selling in but don’t let it keep you up at night. For an even deeper dive into foreign currencies and how sellers like you can stay in the loop – make sure to listen to this episode featuring TJ!Seriously - don’t stress about the currency exchange rates! They will fluctuate but more importantly - they will stabilize. Listen to this episode as @Payoneer’s TJ Hyland gives some useful advice! #Entrepreneurship #Ecommerce Click To Tweet
What is the interbank rate?
How do you know what the current exchange rate is for the currency you have earned in an international marketplace? Can you just Google what the exchange rate is and factor that into your profit margins? Unfortunately, the answer is no. When you google a foreign currency exchange rate, you’ll get the interbank rate. The interbank rate is the foreign exchange rates paid by banks when they trade currencies with other banks.
When you are looking at the exchange rate that you’ll need to factor in for accounting purposes – you’ll need to consider a 3.5% – 4.5% additional fee to cover the costs of converting your funds. Unfortunately, most marketplaces like Amazon don’t spell out their costs for converting your funds in a clear and concise way.
How Payoneer can help ecommerce sellers
Now that you have a stronger grasp on how foreign currency and their exchange rates work – the critical factor comes into play – how to maximize your effort. You work hard to make the most out of every aspect of your ecommerce business – don’t leave money on the table when it comes to foreign currency!
Thankfully – there are amazing organizations like Payoneer who work to help sellers move closer to understanding currency and currency solutions. Payoneer enables millions of businesses and entrepreneurs from all over the world to connect with each other and grow globally through their cross-border payments platform. With Payoneer’s fast, flexible, secure and low-cost solutions, marketplaces, networks, and businesses throughout the world can pay and get paid globally, as easily as they do locally.You work hard to make the most out of every aspect of your #ecommerce business - don’t leave money on the table when it comes to foreign currency! Find out how @Payoneer can help sellers like you! Click To Tweet
Connect with TJ Hyland
Connect With Kevin Sanderson
TweetsLet’s get down to the basics - how does currency work? Tune into this episode of Maximizing #Ecommerce as TJ Hyland gives a succinct answer! #Entrepreneurship Click To Tweet Do you know what the interbank rate is? Chances are that’s a foreign term to you! Get the full breakdown of that concept and what it means for ecommerce sellers on this episode of Maximizing #Ecommerce! #Entrepreneurship Click To Tweet
Check out our conversation on YouTube