Business Travel Expenses? How To Get It Right
TranSwap's multi-currency global account makes corporate travel easy and simple
Most countries are now fully open again and welcoming to tourists and business travelers. With the easing of travel restrictions worldwide, it is becoming more viable to think about growing your business globally or conducting business abroad. Many businesses will be traveling a lot more in comparison to last year. As an industry, business travel has risen year after year. The Global Business Travel Association (GBTA) predicts a surge in global business travel spending in 2022, reaching full recovery to the $1.4 trillion pre-pandemic mark by 2024 (GTBA, 2022).
However, as we approach the end of the year, budgets are more tight and limited. Therefore, here are a few things to watch out for when traveling in the upcoming holiday season.
Foregin Transaction Fees
Foreign Transaction Fees (FTF) are a fee charged by a credit card issuer or bank for every purchase made in a country outside of your local country. The fees vary depending on the credit card or bank provider but it is usually around 1%~3%. The fees can add up if you are not careful. Many international travelers or businesses commonly encounter foreign transaction fees. FTF can be really frustrating as they are often expensive, costly and hidden.
Common Foreign Transaction Fees
1. Payment Network Fees
This is charged by the credit card network (e.g. Visa or Mastercard). Visa and Mastercard both charge a fee of 1%.
2. Credit card or bank fee
Depending on the credit card or bank you use - some providers add a charge on top of the network fee, usually around 1%~5%.
3. Conversion Fee
Currency conversion fees are usually an addition to any foreign transaction fees. You can expect this fee when you pay in a foreign currency. Being charged €10 doesn't mean you will be charged $10. The charge will be converted to dollars using the current exchange rate.
How to avoid Foreign Transaction Fees
1. Apply for a Credit Card with no FTF
When withdrawing funds from a foreign ATM or making an international transaction, foreign transaction fees can add up. Fortunately, there are many credit cards like travel cards that don't charge foreign transaction fees as a benefit or card member perk.
2. Leverage local bank networks
If you choose to do a bank-to-bank international transfer, this means you are leveraging local bank networks to make a payment, rather than using the SWIFT network. SWIFT transfer fees can be quite high, while local transfers are cheaper with no hidden fees.
3. Operate with a multi-currency account
Transwap's multi-currency global account means that you can hold up to 34 currencies. SMEs and business owners can bolster your competitive advantage in local markets by paying and receiving money in the desired currency. Transwap offers more competitive rates than traditional banks. Businesses can save on FX costs through real-time access to pricing and execution of currency conversion.
Foreign Transaction Fees are a common business travel cost but here are other costs to be aware of:
- Insurance and safety
- Conference fees
- Paid internet
As you can see, there are a lot of factors involved in planning for business travel. The common methods of saving money on corporate travel include cutting the costs of hotels, setting an allowance for food and transportation or hiring a travel management service. However, the best advice for startups and SMEs would be to plan ahead. Planning early is a golden rule when it comes to saving and budgeting money. In the world of corporate travel, it’s always wise to book flights and hotels in advance, as they can dramatically increase in price nearer the time.
Most importantly, travel with Transwap’s multi-currency account. Not only can you access, track and manage multiple currencies in one single platform but you can also convert and hold up to 34 currencies. SMEs and entrepreneurs can optimise costs and manage spending by tracking each transaction in their accounts. On a budget? Set a daily or monthly limit on your card to avoid overspending.