Currency Conversion for Freelancers: Making the Most of Your Foreign Exchange

Freelancing is a beautiful thing, but currency conversion for freelancers can be a bit less enticing. Yes, one of the big benefits of freelancing is that you can get paid from anywhere and everywhere, but your currency conversion could be costing you more than it should. If you're not taking full advantage of that benefit you're missing out!

As a business owner, you keep a close eye on costs, from website hosting to transaction fees charged by your payment processor. But the exchange rates that go along with those transactions can be misleading, since most people won't even notice them; most of the time, they're a forgotten footnote to the transaction.

Optimizing your currency conversion as a freelancer could be well worth your time, especially since the more you exchange, the more you'll save. That's why it's worth keeping an eye on those costs, and minimizing them where possible.

Here's exactly how to do that.

How to Find The Exchange Rate You're Paying

When you convert your money from a foreign currency to your home currency, pay attention to the confirmation screen for your transaction. Most payment processors and banks will provide the exchange rate used before you confirm the transaction.

When you see that rate, here's what you should do before hitting "confirm" on your transaction. Go compare the rate your bank or payment processor is offering you to the current market rate for that type of foreign exchange.

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Surprised to find a big difference between the two? You shouldn't be. Since most people won't compare, and will just accept the posted rate, banks and payment processors don't have much incentive to remain competitive with their rates.

Banks can also charge a lot of service fees for foreign exchange transactions, so make sure to add those in when you're looking at how much you're really paying to get your money exchanged.

Watch Out for Platform-Specific Rates As Well

It's not just banks who can offer sub-standard exchange rates due to the captive nature of their audience. Even platforms like Paypal, Stripe and currency brokers can charge fees that are far too high for the service you're getting.

Payment platforms like Paypal and Stripe will use their built-in exchange rates, similar to the way banks apply theirs to your transactions. Since you're already paying a per-transaction fee of anywhere from 2.9% to 3.9% to use these platforms to process payments, there's no reason to pay an additional 2% to 3% spread on your foreign exchange.

Example of what 3% savings actually means:


As for currency brokers, some may display the market rates which A) can be misleading; when you go to book your actual deal the rate will be different or B) in exchange for a market rate a broker will charge high service fees for the privilege of accessing that rate. When all's said and done, you may be left with similar costs, even when receiving a perceived favourable foreign exchange rate.

How to Improve your Freelance Foreign Exchange Rate

So if banks and payment platforms will make you accept the posted exchange rate, and brokers might charge you high fees for a better rate, what can you do about it?

You can keep your money in a bank that offers accounts in that foreign currency for one, but that only helps if you can wait to exchange the money until there's a favourable exchange rate. However, it's still a good first step.

Once you've got that established, don't just rely on that bank to hold your money, and make transfers when you need them. Your next step is to find a currency exchange platform.

Nothing Will Beat a Currency Exchange Platform

The best way to optimize your exchange rate is to use a platform whose competitive advantage is their exchange rate. Those services are called currency exchange platforms, and they will generally offer you significantly better rates than posted bank rates or platform-specific rates.

To get started, just set up an account with an online currency exchange in your home country. If that's Canada, you can get started today by filling out a VBCE Online Personal client application form to see if you're qualified.

Vancouver Bullion & Currency Exchange is the leading currency exchange service in Western Canada, with 27 years in business. With their online platform, ideal for recurring foreign exchange transactions, you can now use them for your forex needs across Canada, and access better rates for all of your freelance foreign exchange needs.

They offer services like favourable exchange rates on small or large transactions (Tip! - the larger the transaction, the tighter the spread. Generally your first break will come on a transaction > 10k) , a live market rate tracker to make sure you're getting a market-competitive rate, and the ability to target a specific exchange rate. You'd never find those kinds of services offered at your current bank or payment platform to help you optimize your freelancing foreign exchange.

The Bottom Line Impact: Keep More of the Money You Make

You work hard as a freelancer to earn money from your clients, both foreign and domestic, and you already pay steep fees to accept different payment methods. You can keep more of your money by making sure you're not losing out on hundreds of dollars a year to sub-par exchange rates.


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The information and opinions contained herein are gathered from sources which are thought to be reliable but the reader should not assume that the information and opinions are official or final. VBCE makes no warranty concerning the accuracy of the information and opinions, and accepts no liability for the consequences of any actions taken on the basis of the information and opinions provided. The content is for general information only and does not constitute in anyway giving financial advice.