For retailers dealing with global customers and suppliers, the cost of international payments can significantly impact their bottom line.
Every international dollar a business generates may be unnecessarily converted up to three times and attract fees at each conversion. Fees can be charged when settling funds into your processing account, transferring funds to your bank account, and paying suppliers. These costs can quickly add up and take as much as 5.5 per cent away in fees, ultimately impacting profitability. And during times of low margins, this can be the difference between making or losing money on each sale.
Airwallex helps address this issue by offering a financial technology platform that helps businesses of all sizes accept payments, move money globally, and simplify their financial operations. Designed for modern businesses growing beyond borders, Airwallex is now trusted by leading companies around the world to manage everything from payments, treasury, and spending to embedded finance.
“Our solutions allow businesses to collect and hold multiple currencies without any forced currency conversions or being subject to hidden foreign exchange fees,” said Airwallex’s VP of growth for Australia and New Zealand, Matthew Sek. “By removing the unnecessary friction and cost inherent in the traditional financial system, we can help entrepreneurs achieve their global ambitions”.
Skip Lissiman, executive chairman of international accessories brand Poppy Lissiman, faced this exact issue as the business grew its international presence. “We found the traditional banking model for international trade outdated and expensive,” said Lissiman. “I think any business that wants to get into international trade needs to look very closely at trying to keep their costs down and having a flexible financial model that’s easy to use”.
Today, the business sells in Australian dollars, US dollars, and the Great British pound, and trades in several other currencies across its operations. By partnering with Airwallex, the business has saved six figures in foreign exchange costs and several hours of bookkeeping each week thanks to Airwallex’s direct connection with Xero.
“It’s a difficult market out there. Costs keep going up, but it’s hard to sell your product if you keep pushing prices up, so you need to keep costs low if you are to maintain your margin,” said Lissiman. “Airwallex offers a low exchange rate and links directly into Xero, making it flexible and easy to use – and it’s become absolutely essential in keeping our costs down”.
The business’s savings in foreign exchange costs have helped improve profitability and allow the business to invest in other activities, such as profitably participating in peak sales events. “The challenge with sales is that discounting can become a race to the bottom,” said Lissiman. “If your margins are gone, cash becomes an issue, and this can then turn into an insolvency issue. It’s why we continually keep a close eye on costs and margins, and try to discount only once or twice a year”.
Skip sees the cost benefits of working with Airwallex as just the beginning. “We see our relationship with Airwallex as a partnership. We have a dedicated account manager who helps us address any issues that come up, although we really don’t have many at all,” he said. “And we want to continue working together with our account manager to keep finding new and better ways to do business”.
The Poppy Lissiman story comes from Airwallex’s Passport to Peak Profits, a free guide where you can find more tips for peak sales success across finance, marketing, and shipping.
