Cryptocurrency

Making import-export to and from Europe easier

The import-export business is a business focused on movement – not just ofgoods, but also money. Importer-exporters must deal with bureaucracy, logistics and various business risks to successfully keep the wheels of commerce turning.When it comes to goods, importer-exporters can work with freight forwarders and custom brokers to ease the burden of logistics and related bureaucracy. When it comes to managing foreign currency payments most importers and exporters were until recently stuck dealing with relatively uncompetitive and bureaucratic banks. Now, with the availability of okoora’s ABCM platform, importers and exporters in Europe can handle their cross-border payments more efficiently, saving effort and costs.

Insuring against risks in import-export

The business of transporting goods from country to country leads not only to logistical challenges but also a variety of risks. For goods, there is marine and cargo insurance to mitigate the risk that good are lost or damaged in transit between the point of origin and market of sale. For money, there is hedging to insure against the risk that significant foreign exchange changes undermine the business fundamentals of the deal after it was originally struck.

Foreign exchange risk applies equally to importers and exporters. The key is that invoices are not immediately paid when they are issued, but rather sometime after all the goods are received. This leaves open a window of time when the foreign exchange rate can change. It can either move to a position favorable to the bottom line of the exporter by increasing the amount of local currency they will receive for the same amount of foreign currency earned or it could move against the exporter and reduce the amount of local currency they will receive for the foreign currency earned. For an importer, an appreciation in the value of its local currency could lower thevalue in local currency terms that it must pay for foreign goods. However, a depreciation in the value of the local currency will leave the importer needing to spend more local currency to import the same consignment of foreign goods.Either way, there are gainers and losers, and prudent businesspeople will want to manage the risk that they are on the losing end.

Hedging forex risk with okoora’s ABCM

Most small and medium size businesses do not have a financial services provider willing to enable them to insure their invoices against unfavorable currency movements. This would require givingaccess to trading rooms and currency dealers on a large scalefor transactions in the millions or even hundreds of thousands of euros– something few banks would find worth the effort. Okoora fills this void.

By offering a software platform that relies on AI and automation to guide SMBs to the hedging decisions right for them, okoora cuts down on the need for active consultation with its currency dealers. Providing access to this platform with a freemium plan that starts free and increases in cost as the user expands their usage, okoora offers access to currency hedging to the widest range of businesses possible. Moreover, okoora has an established and straightforward KYB onboarding process and compliance department designed to ensure that new customers can get set up and running much faster than it would take with a traditional bank.

Other ways to use okoora’s ABCM

Not only does the ABCM platform enable risk hedging, but it also enables SMB users to easily open multi-currency accounts across a wide variety of countries. Importers and exporters can use these accounts toissue and receive payments to and from business partners abroad. By operating multiple accounts in multiple currencies trading companies can reduce their need to frequently convert currencies, thus reducing their foreign exchange risk exposure.

Lastly, the ABCM platform enables foreign currency exchange at extremely competitive rates thanks to okoora’s access to expanded pools of forex liquidity due to its connections to currency trading rooms arounds the world. This saves importers and exporters on their foreign currency conversion expenses.

Example of a flower grower

Take for example, okoora client Bar Hadas Agricultural Solutions, a rose farm located in Israel that imports organic pesticides from Europe priced in euros. Before using ABCM, Bar Hadas exchanged currency through a single bank to pay for its pesticide imports. With okoora’s ABCM, it receives competitive exchange rate quotes from multiple sources, ensuring it gets the best deal on the market.

How to get more details about ABCM

To find out more about the benefitsof usingokoora’s ABCM, go here and fill out your details. A representative of okoora will get in touch.

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