Tips to Get the Best FX Rates for High-Risk Businesses

The phrase ‘high-risk businesses’ refers to businesses which operate in industries with elevated financial, legal or regulatory risks, such as cigars and tobacco, CBD and hemp, gambling, firearms, debt collection, smoking accessories, e-cigarettes, vapes, online casinos, cryptocurrency, and adult entertainment. Such businesses face increased financial and regulatory challenges due to the nature of their industry, and these potential risks associated with their domain also make them less appealing to financial institutions. Even banks are often hesitant to work with these high-risk businesses due to increased scrutiny, frauds or chargebacks they face. In short, these high-risk businesses face multiple financial challenges, like getting banking services, higher foreign exchange fees, additional service charges, and increasing complications for them.

FX rates and High-Risk Business

Cross-border transactions are part of international businesses’ everyday operations, and not getting favourable rates, paying higher transaction fees, and facing stringent regulations make it increasingly difficult for high-risk businesses to manage international payments. While getting the best FX rates for high-risk businesses seems like a dream, however, it isn’t impossible. There are some ways to avail yourself of that and protect your profit margin.

Get the best FX rates for high-risk businesses with the following strategies:

1. Work with Specialised FX Provider

For high-risk industries, it is challenging to get foreign exchange services from traditional banks due to the risks involved with their industry, and even if they do get the service, they often have higher FX fees and less favourable exchange rates. One strategy to get the best FX rates for high-risk businesses is partnering with specialised FX service providers who can cater to their needs. These FX providers like Linea Global offer more competitive currency exchange rates, faster transactions, more flexibility and even customised solutions for your business. Compared to traditional banking services, financial service providers have a more lenient approach towards compliance issues, making it easier for high-risk businesses to make their transactions across borders.

2. Negotiate Rates Based on Volume

High-risk businesses, especially those in industries like e-commerce, cryptocurrency, etc., are often required to make recurring cross-border transactions. Such industries can leverage this high volume of transactions in favour by getting a competitive FX rate. FX service providers are often attracted towards higher transactions, so businesses can use them to their advantage by highlighting consistent revenue your business can bring to them and requesting preferential terms. With this valuable strategy, high-risk businesses can secure better deals, which can contribute to higher profits, help them gain a competitive edge in the industry, and improve the cash flow of their business.

3. Get Multi-Currency Account

Another valuable tip to secure the best FX rates for high-risk businesses is getting a multi-currency account. For businesses dealing with multiple currencies, having a multi-currency account can be a very cost-effective solution for them. These accounts allow businesses to send, receive and hold funds in multiple currencies with better FX rates, eliminating the need to pay FX fees for every transaction. Another advantage of having a multi-currency account for high-risk businesses is that it will mitigate currency risks, reduce the risk of delays in conversions, and help you manage business transactions with more control and less cost.

4. Optimise Transaction Timing

The FX market is highly volatile and unpredictable; one sudden market fluctuation can highly impact the currency rate, and if you are not monitoring current rates, trends and events that can result in fluctuations, you can get significant losses in FX rates. Therefore, it is immensely important to stay informed regarding currency rates to identify the right opportunity and convert currencies at the most favourable rates. Now, we understand that monitoring the market all the time isn’t possible for businesses, but being a high-risk business, you should leverage every opportunity to get the best rates and save costs. You can leverage technology and get tools and online platforms to help you stay informed and get the best FX rates for high-risk businesses with rate alerts and FX conversion options.

5. Lock in Rates with Forward Contracts

Currency volatility can pose significant risks to businesses, which can be minimised with forward contracts. High-risk businesses should opt for forward contracts to lock in a specific exchange rate for future transactions to protect their money from unfavourable FX market fluctuations. This strategy is highly beneficial for hedging against the potential risk of loss and helps your business maintain cash flow despite market shifts.

6. Always Consider Total Cost

Another essential tip to get the best FX rates for high-risk businesses is always looking for the total cost instead of just FX rates. This simple strategy can help your business save a lot of money, as total costs can be higher even if you are getting a competitive FX rate, especially for high-risk businesses that are charged more fees and transaction charges. Always determine transaction costs, intermediary bank fees, currency exchange fees and other additional costs to compare the overall costs of various financial service providers and get the best cost.

So, if your business is in a high-risk industry and you are looking for a solution to get competitive FX rates and other financial services for your business needs, Linea Global is here for you. We offer the best FX rates for high-risk businesses as well as multiple currency trading options like spot trading, forward trading, etc., so you can choose according to your needs. We also offer services like rate alerts, so you never miss a chance to make a profit! Grow your business globally with Linea Global!