Small business guide to online FX

Knowing what to look for when choosing an online foreign exchange provider can be tricky, not to mention time consuming and likely scoring pretty low on your to-do list. However, taking an interest in your business’s FX requirements is important. FX may be a by-product of your actual business, but if managed poorly it can put a dent in your bottom line. See below for a quick checklist of what you should consider when choosing your online FX provider:

1. What FX rate do you get?

Never be afraid to question your provider about the FX rates they quote you. Booking exchange rates online is a low cost business and this should be reflected in the exchange rates you receive. All providers keep a "margin". This is the difference between what they buy the currency and where they sell it onto you. Ask what margin you are receiving.

2. Fees

Most FX providers will charge a fee to transfer money. Free transfers are becoming more commonplace, but a free transfer does not offset a bad exchange rate. Take the time to compare fees and exchange rates.

3. Easy to use

Foreign exchange doesn’t have to be complicated. Buying or selling foreign currency online should be a simple, fast process. A lot of websites have unnecessary bells and whistles. When researching an online provider, look for a site that allows you to complete your transaction quickly and easily with minimum fuss. A good site will make you feel as if you’re being guided through the payment process.

4. Security

How safe are your funds? Always check who is backing your transaction. It's great to get a good rate and no fees, but you need to know that your provider can offer online security and full traceability on your money. Passwords and security tokens can seem tedious, but they offer security and peace of mind where money is concerned.

5. Customer support

Make sure you have a point of contact. If you have any problems with booking a rate or organising a transfer, you need to feel secure that you can contact a customer care representative via phone, email or fax.

6. Risk Management

Choose a provider that can help you protect your business against adverse foreign exchange movements. Actively managing your FX requirements could save your business money.

XYLO foreign exchange gives your business access to the wholesale FX market and, if you register by August 31, 2008, you'll also receive unlimited FREE international payments for 6 months. With competitive FX rates, no minimum transaction size, and a simple, secure online interface backed by Westpac, XYLO is a name you can trust. To find out more or to register, go to www.XYLO.com.au or call 1300 995 639.