Ultimate Guide to Managing Currency Risk for International Amazon Sellers

andy-from-payoneer-in-our-brighton-online-seller-meetup

With Global eCommerce booming, there is rise in UK sellers going global with Amazon Marketplaces. In this year we have seen sellers growing rapidly in the US and also expanding into Canada and Mexico. There are already complications with regards to Income Tax and Sales and currency exchange is another area that requires our attention.

There are two areas we need to look at:

  • Amazon already manages currencies in many countries and pays you in GBP but also makes money on spread
  • When there is devaluation of GBP as in recent case, we are better off not converting and paying our suppliers in USD

In both of above cases external currency solution, Payoneer can help. Recently we have spoken with Andy, UK PayoneerBusiness Manager and asked a few questions in this area and here’s the list:

#1 Do I have to register a UK Bank account for Amazon.com

You can register a UK bank account for Amazon.com, however, this will have an effect on the amount that you receive into your sterling bank account as Amazon will utilise their Amazon Currency Convertor Service to convert your US$ sales revenue into sterling. There is a more efficient & beneficial way to manage & convert your international marketplace sales revenue.

#2 Is there is any alternative solution to UK bank account?

Yes – Payoneer provide US$ collection accounts that are physically located in USA, which you can register on Amazon Seller Central. When Amazon pay your sales revenue, they send US$ into your segregated Payoneer collection account instead of converting the US$ into Sterling automatically and depositing into your nominated bank account. Payoneer also provide collection accounts in Sterling, Euros, Japanese Yen & Chinese Renminbi – which can be used for marketplaces that transact in these currencies.

#3 How do my funds get transferred to Payoneer account?

  • Once you have registered your US$ collection account with Amazon (or many other marketplaces in the USA & globally that we have partnered with), Amazon (or alternative marketplace) will send your payments to this account.
  • Payoneer will notify you that you have received a payment into your account. The funds can stay in the account for as long as you require and when you want to bring your funds back home, you access your account via the Payoneer platform and choose the amount to want to convert and then confirm the transaction. The funds are converted into sterling (or whichever currency you have nominated) at the agreed margin set in Payoneer’s back office, to the currency conversion.
  • Payoneer has a unique settlement solution & we have developed local in-country bank accounts in the vast majority of countries. This enables us to make local settlement into account holders bank accounts (in the UK this is done via faster payments) and negates the requirement to send payments internationally via SWIFT, which means we do not have to charge any fees for the movement of funds.

#4 Why is it free? How do they make money?

 There are no costs for opening & maintaining our collection accounts & we do not charge any payment fees due to our local bank network. Payoneer makes its revenue from the margin applied to the currency conversion when the seller repatriates funds from their collection accounts & convert into their local operating currency, sterling for example.

# 5 Are their exchange rate better than banks?

Payoneer offers extremely competitive exchange rates, particularly on smaller amounts which banks do not like to convert as they make little revenue from the currency conversion. Payoneer does not charge any wire fees, unlike banks that can levy up to £50 per wire fee. Also, banks do not seem to have any consistency in the margin they apply to each transaction, unlike Payoneer who fix the agreed margin into our back office so that its applied to each and every transaction. The other factor to consider is the cost of running multiple currency accounts with banks and the charges & fees they apply, particularly if the accounts are used solely for receipt of funds.

# 6 How much can I withdraw at once?

 There is no limit to the amount that can be withdrawn to your nominated bank accounts. Account holders can apply for multiple currency pre-paid Mastercard cards that are linked to the collection accounts and funds can be transferred onto these directly from the collection account for use to purchase goods & services online or to withdraw funds from ATM’s. The daily limits for these are: $/€/£2,500 online purchases & $/€/£2,500 ATM withdrawal.

# 7 Can I pay our suppliers in USD?

 Yes, there are 2 ways that you can pay suppliers from your US$ collection accounts. The first is via the pre-paid card that is mentioned above & the send is via the Payoneer eco-system, Make A Payment. Payoneer account holders can send money to other Payoneer account holders free of charge anywhere in the world. Merchants are creating their own eco-system with their suppliers, so that they can pay them directly from their Payoneer US$ collection accounts which negates the requirement to convert US$ back into your operating currency and then to re-convert back into US$ to pay suppliers. This saves money as no currency conversion is required or international payment fees levied.

#8 How do I pay to our Chinese suppliers ?

Via the process mentioned above.

#9 What differentiates Payoneer from other providers of these services?   

  • Payoneer is a global, regulated & financially secure payments company that has developed its own network of in-country bank accounts, which enables Payoneer to remain in control of client funds as they’re not sent via the international bank network SWIFT. This also means that we do not charge international payment fees. We also have great functionality with our collection accounts, such as pre-paid mastercards that can be linked to the accounts & also Make A Payment in-network payments to suppliers.
  • Payoneer collection accounts can also be used outside of marketplaces on invoices and we have a billing solution where payment requests can be sent from the Payoneer platform to business clients and they can settle invoices via local banking methods/cards in their own currency. This can really help build your business with international clients and reduces the risk of non-payment. Our competitors do not have this functionality with their collection accounts.
  • Payoneer has partnered & integrated with many marketplaces globally, which enables sellers to expand their international businesses into exciting new markets and utilise their collection accounts to receive all sales revenue from these marketplaces. They can then repatriate their global sales revenue in a secure & efficient way.

#10 Is there a UK support team?

 We have a support team in the UK currently, which will increase in size during 2017. In addition to our UK team, we have large customer service teams based in USA, Israel & Hong Kong that operates 24/7 with 35 languages spoken.


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