Savings Case Study for B2B Exporters to Europe

Who should be reading this article:
If you are a small to medium size exporter to Europe and you get paid in Euros or in your local currency.

There are nearly 200,000 banks in Europe! All of them have varied fee structures between 3% to 6%, and processing times for transactions. Which bank does your customer in Europe use to send you your payment and how much does this end up costing you?

We take this risk and uncertainty away and provide you with the cheapest and most transparent pricing model for collecting payment in Europe.

Case Study of exporters from Brazil and India to Europe

Our Story

Two years ago one of the owners of B2B Pay was helping restructure a small pharmaceutical exporter in India. Like all small exporters this company faced a lot of challenges in selling, profitability in their products, high capital costs and lack of enough working capital. The issue that frustrated the owner most, was when he send money to India personally using one of the many innovative companies doing international money transfers, the money arrived fast and with very low fees.

This was the exact opposite when adding up all the costs for international transactions we were losing 3–5% on transactions fees. As a pharma manufacturer the gross profits were in the 10–20% range. This effectively meant that we were losing nearly 20% of our gross margin on transaction fees!

This is where B2B Pay started as we wanted to use the latest technology to save hard working exporters to Europe money and hence improve their profitability.

Every year over 100,000 small exporters send goods and services to their customers in Europe. Most of these deals are agreed to in a similar manner. The importer and exporter come together and agree on a deal, sign contracts, the exporter ships the goods and the Importer makes the payment.

We worked with two pharmaceutical exporters in Brazil and India to understand the process and see where we could help.

High cost for receiving the payment

The area of exporting where we found the highest cost was the actual final payment received by the exporter (either as a direct payment or via meeting the conditions of a Letter of Credit). The total cost including transfer fees and currency conversion fees is between 3% and 6%

Why is this?

We talked to various parties including bank currency traders and treasury staff in multi-national companies to understand the reason for the high costs.

The reasons are simple

  • The banks have a lot of old and manual processes which cost a lot. these costs are passed on to their customers. On top this there are a lot of Anti-Money Laundering (AML) and regulatory checks they need to perform. For each bank. If you’re doing business with various importers you need to repeat the same process for each bank.
  • Smaller banks in Europe use other banks to make currency conversion and international payments. This means the cost to the customer can double due to costs incurred in two or more banks in the system.
  • Small transactions below €200,000 in value are very time consuming for banks hence cost more. In fact if you have a transaction worth one to five million euro, as a percentage this will be 90% cheaper than a small transaction.

What are the costs?

The costs are made up of two components: a fixed fee for international transfer and costs relating to converting the foreign currency.

  • Fixed transfer fee: This is the international bank transfer cost (SWIFT, etc) of €30 to €100 fixed fee.
  • Currency conversion charge: This part makes up the largest portion of the fee. This is more complex and the hidden fee that banks charge. When changing from one currency. you see this at the airport. the difference between the buy and sell rate.

Airport Currency exchange example

On the left is a screenshot of an Airport currency exchange provider. Most of us have seen these at Airports. The difference between the buy and the sell rate is your real cost. For example first buy euros then buy back your local currency. this change will cost you. For example when I change 100 USD to EUR you will get €91.3. Now when you change that amount back to USD you get only $67.3! In our example we have done the conversion twice so we faced the conversion fee two times. But this example shows how high conversion fees can be! The same principle applies to international trade transactions: the percentage is lower than cash conversions but still between 3 to 6 percent.

How are we fixing this problem? Why are we so much cheaper?

The fact is if you exchange a very large amount say one million Euros it’s very cheap. We are a technology company automating all the processes for currency conversion and international payments to bring down the costs. Instead of making small currency conversion we add them all up to bring down the per transaction costs. these savings we pass on to our customers.

Based on this technology we offer a simple solution for exporters to Europe:

  • To take care of all the manual processes, when you sign-up as our customer we conduct all the necessary checks and also enter your bank account details into our system.
  • To collect money in Europe we provide you with a European IBAN bank account number. The IBAN is individual to you so that we can track your money and make fast payments. the same IBAN is valid in 34 European countries to collect payment in Euros for free.
  • As soon as the money arrives into your European account we send it immediately to your local bank as we already have your bank account loaded in our system. Our fees for currency conversion are up to 80% cheaper than banks. This means you are saving 2–5% on the value of the transaction. This will have a direct impact on your profitability of 10 to 20%.


SEPA: The Single Euro Payments Area (SEPA) is a payment-integration initiative of the European Union for simplification of bank transfers denominated in euro. As of July 2015, SEPA consists of the 28 member states of the European Union, the four member states of the European Free Trade Association (Iceland,Liechtenstein, Norway and Switzerland), Monaco and San Marino.[2]Andorra will become part of the area in 2016.

Example: all bank transfers within this SEPA area is free

Hidden Conversion Fees: The real exchange rate is called the mid-market rate. It’s the official, fairest rate — the one you see on Reuters. Banks have a lot of overhead costs this means that when they convert your amount they charge a large fee for this.

More information at