You may or may not have heard of Airwallex, but if you’ve been involved in the online banking world for the last few years, you assuredly would have heard of Wise, or Transferwise as it was formerly known. Wise was the first popular online bank, made primarily for individuals and allowing them to transfer money almost anywhere around the world instantly. Once the money was transferred, they often had unique sayings like “the fastest tennis serve ever travelled at 263km/h. And you just sent money 1863 times faster.”
Wise worked well if you had a bank account, created a Wise account, deposited money from your individual bank account to your Wise account and then sent it to someone else’s Wise account. They then received the money in their Wise account and withdrew it into their own individual bank account, and the process was complete. Here at Accolution, we have worked with many clients who used this exact process to pay contractors or suppliers in different parts of the world.
But the biggest pitfall our clients continued to run into was the fact that Wise was intended for individuals, not businesses. They were proud of this fact and wanted to continue supporting individuals and help them send money around the world. There is nothing wrong with that obviously, but it didn’t help our business clients, so we went looking for alternatives.
Accolution first came into contact with Airwallex in June 2019. Before COVID-19 even existed! Up until this point, Airallex had launched its original money transfer software in 2016 and raised $200 million USD in investor capital. $200 million USD sounds big, but it was still early days for Airwallex. Their company valuation went from $1 billion USD in 2019 to a valuation in November 2021 of $5.5 billion USD! Airwallex has managed to multiply its value by over 5 times, and founder Jack Zhang doesn’t expect this to slow down, indicating that the provision of global economic infrastructure in a digital economy is a trillion-dollar opportunity.
Airwallex isn’t going away. They have a firm foothold in the industry and are going from strength to strength. So, I wanted to outline below why we have found Airwallex so helpful, and no doubt these are some of the exact reasons it has been able to reach that $5.5 billion valuation.
Foreign Currency Transfers
Airwallex allows you to set up an online business bank account if you have a registered business in one of 55 countries which are listed on their website. If your business is registered in Australia, China, New Zealand, Europe, UK, Canada or the US, you’re fine, don’t worry about it. If your business is registered in another country, check out this list just to be sure. Once your Airwallex account is set up, you will have the ability to send money to over 130 countries and regions. Literally, almost anywhere you need to send money, you can with Airwallex!
You’re waiting until I say there is a 5% foreign currency fee, aren’t you? Not with Airwallex! Airwallex only charges a 0.3% foreign exchange fee, and the rate you’ll receive is the live exchange rate for the currency you are sending. Everything else is virtually fee-free. Airwallex’s local transfer network allows you to send money to countries you have never sent money to before, with no transfer fee whatsoever. The only time you will pay a transfer fee is when you have to use the SWIFT network instead of Airwallex’s local transfer network. No monthly bank account charge, no charge for using a card and paying in foreign currencies, and no annual fee for having an Airwallex card. Everything is fee-free. You only pay an insignificant, barely noticeable fee when exchanging currencies. 0.3% is significantly cheaper than your big four bank account than PayPal or any other online alternative worth its time that we’ve come across. And that leads us into…
Airwallex allows you to create as many virtual or physical cards as you like. Seriously, there is no limit! Do you have a business credit card that has to be constantly shared around, and when Jane needs the card, Matt has it, and when Matt needs the card, Jane has it? Well, that is never a problem with our clients using Airwallex. Create an Airwallex card for Matt and another for Jane. Create two for each of them if you want as backup!
The great thing about Airwallex cards is that they are very, very customisable. You can set transactions daily, weekly, monthly or all-time limits. So if Jane is known to buy a little bit more than she should sometimes, limit her spending to a certain amount each month and don’t worry about it anymore.
Airwallex cards are also useful for putting online subscriptions on. I’m sure you’ve experienced the trouble of having one card expire and then having to update all of your subscriptions with the new card details, expiry and CVV. Annoying right?! Well, with Airwallex, you can create a new card for every single subscription you have. Have a set subscription that is only supposed to be a certain amount a month, or is it only supposed to run for a certain length of time? Create a monthly or all-time limit to ensure you are not charged for any more than you should. If the card does expire, it’s only affected one subscription and you can simply create another virtual Airwallex card and give one company the new card details, rather than giving those details to dozens of different companies, once you find out that dozens of subscription payments have failed.
This section is different to the first one, I promise! Payment processing is more around you getting paid, than you paying other people. This is much more relevant to those of you with an online store. We work with clients using all sorts of online stores, whether it is WooCommerce, Shopify, BigCommerce, Odoo, eBay, Amazon etc. All of those platforms deposit money into your bank account when you make a sale, and they take a fee when they do so.
One of the real benefits of Airwallex is taking advantage of their 0.3% on foreign currency and hooking up a foreign currency online store to your Airwallex account. For example, you may have multiple Shopify stores, one collecting Australian sales in AUD, another collecting New Zealand sales in NZD, and a third collecting US sales in USD. Your AUD Shopify payouts can be deposited into any AUD bank account you, whether that is Airwallex or not. But if you are depositing your NZD & USD Shopify payouts into your AUD bank account, you are likely losing 2-5% on your sales in additional foreign currency conversion fees. 5% can be the difference between whether you make a profit this month or not!
Airwallex allows you to connect you Shopify account(s) so that you don’t lose any more than the fees Shopify already takes. Make a sale in NZD, collect it is NZD with Airwallex. Make a sale in USD, collect it in USD with Airwallex. Shopify currently restricts payouts to the home currency in which your business is registered, forcing you to convert from NZD or USD to AUD. However, if you set up a separate company in New Zealand or the US, Shopify will allow you to receive payouts in NZD and USD. Airwallex ensures there is no need to fly to New Zealand and the US to set up a bank account over there, just start depositing foreign currency Shopify payouts into your AIrwallex bank account right away! To read more about setting up a foreign entity, check out this article.
Our clients have found this favourable for two reasons. Firstly, it allows them to convert back to AUD when the exchange rate is more advantageous, and secondly, our clients may pay suppliers or vendors in USD or NZD and no longer have to pay to covert their USD sales to AUD and pay again to convert their AUD back to USD to pay their supplier/vendor. So hooking up Airwallex to your online store can save you from paying one, and potentially two pointless foreign currency fees.
Separation of duties
Finally, and closest to the heart of an accountant, is the segregation of duties. Segregation is just a fancy word for separation. When you are running your business as a one-man or one-woman show, you have no alternative but to do everything yourself. But as your business grows, and you hire employees, and have to prioritise your time as the business owner, out of necessity, you must delegate work from yourself to someone else.
As you begin to delegate part of the finance function of your business, you will want to ensure that you have one person submitting payments for approval and another person approving those payments. You, as the business owner may still be approving those payments but you have someone else do the extra work of determining who needs to be paid, how much and when (if you aren’t doing this yet and this sounds really nice, reach out – we’ll help you out). You can give them access to your Airwallex account and completely customise how much access they do or don’t have and allow them the ability to submit payments for your approval only. You will then have the final say on any payments going out.
We have found Airwallex to be the easiest of all the bank we have worked with in this regard. Many of the big four banks offer this function too, but the initial set up of a new user takes days, if not weeks. Whereas setting up a new user with Airwallex with 100% custom access takes about 2 minutes and the new user will receive an email right away where they can set up there account instantly. No need to take their physical drivers license or passport into a branch and waste valuable time.
Overall, we have found Airwallex to be a game-changer in the small to medium business finance world. It is helping our clients save money they don’t need to spend, and it’s helping make payment processing processes more efficient and streamlined. If you are interested in setting up an Airwallex account for your business, use this link for free foreign exchange up to $20k. If you need help with your own business bookkeeping or finance function, or maybe you just need a part-time virtual CFO to help you keep your business on the right track financially, then by all means, reach out to us anytime.
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