Payability and OFX have teamed up to offer a streamlined global cash flow solution and preferential rates for cross-border marketplace sellers.
A new global partnership provides online sellers with next-day payments from their U.S. marketplace sales, and big savings on currency conversion when they bring these sales proceeds back home.
On one side of the partnership is Payability’s Instant Access service. This provides next-day payments from marketplace sales, covering Amazon, Walmart, Newegg, Tophatter, Jet.com and MoreCommerce. Instead of payments taking weeks, online sellers can receive payments each day.
On the other side is OFX, with their Global Currency Account. This provides local currency accounts in U.S. dollars, British pounds, Euros, Canadian dollars, Australian dollars and Hong Kong dollars. Sellers can pay international suppliers directly from their account balance, or transfer funds home at exchange rates which offer significant cost savings.
The two services work in tandem to help sellers accelerate their cash-flow and bring more money back home. They can make more frequent stock purchases, pay suppliers more efficiently, and just grow faster overall.
Here’s everything you need to know about the new partnership between Payability and OFX.
- How does Payability provide next-day payouts to sellers?
- How does OFX help international sellers?
- How did the partnership between Payability and OFX come about?
- How do sellers benefit from using both services together?
- What’s next for the Payability and OFX partnership?
- Looking forward: are fast, next-day payouts the future?
How does Payability provide next-day payouts to sellers?
One of the biggest struggles high-growth sellers face is the constant delay in their cash-conversion cycle. Amazon pays out every two weeks, which isn’t ideal for sellers who need to buy more inventory and manage daily expenses. Other marketplaces can take even longer to pay out.
Payability tackles this issue by providing sellers with next-day payments. With access to daily cash flow, sellers are able to grow and scale their business by buying more inventory, shortening lead times, and keeping up with demand.
The service works on the factoring model, where merchants essentially “sell” their Amazon receivables to Payability. After signing up, Payability tracks your sales and pays out up to 90% immediately with the remaining 10% (less their fee) arriving two weeks later when Amazon finally pays out.
While Amazon takes 2-4 days to process payouts, on top of the two-week lead time, Payability uses Same-Day ACH transfers, meaning that transfers initiated before 12:00 p.m. EST will arrive in the seller’s bank account the same day. If the seller is located outside of the U.S. and uses an OFX Global Currency Account, those transfers will clear into their OFX Global Currency Account the same day as well.
How does OFX help international sellers?
Online marketplaces dominate ecommerce around the globe, making it easy for businesses of all sizes to sell internationally. There are many sellers across the world who predominantly market and sell their products in the U.S., for example.
Selling on Amazon.com generates U.S. dollars. Amazon converts these dollars to your home currency using their Currency Converter service, then transfers the proceeds into your local bank account. There is a fee for this service which is built into the exchange rate used when funds are converted.
This fee is a source of revenue for Amazon, but it’s hard to know the true cost of the service when all you see is the exchange rate. Sellers report that Amazon charge around 3.5%, compared to the mid-market rate.
And if you have suppliers to pay in U.S. dollars, your foreign exchange costs are doubled. You can’t pay suppliers directly from your Amazon balance, so you will pay one foreign exchange fee to get your sales proceeds back home, and another to convert them back into dollars to pay the supplier.
This is where the OFX Global Currency Account can help. OFX provide sellers with local collection accounts where they can receive global revenues directly from the marketplaces. They offer a highly competitive exchange rate, with up to 60% in savings compared to marketplace currency conversion costs, and there are no fees for opening an account.
In addition, you can pay international suppliers directly from the currency balances you hold within the OFX Global Currency Account, saving you on double currency conversion costs, although a transaction fee does apply.
How did the partnership between Payability and OFX come about?
Before partnering with OFX, Payability often worked with cross-border sellers, but international bank transfers attracted wire fees and expensive exchange rates, and the complexity of the global banking system meant that transfers sometimes didn’t go through at all.
So, Payability started asking international customers to open accounts with foreign exchange companies like OFX so they could deposit daily payments into a local account, and found that the service worked so well that a formal partnership would benefit all their customers.
For OFX, the partnership allows them to help international sellers gain daily access to their U.S. sales proceeds at a discounted rate, and save on fees when they bring those proceeds home.
With Payability providing a financing solution and OFX sitting comfortably in the currency exchange sector, the partnership is a positive move for customers of both companies. Together, they ease the pain of both slow payments and uncompetitive exchange rates.
Payability and OFX remain separate companies, with their own application processes and compliance requirements, however, the user experience has been crafted in a way to make the dual-onboarding process as seamless as possible.
How do sellers benefit from using both services together?
The partnership comes with dedicated client support that includes global customer services and a personalized experience depending on what kind of business the seller is running. Once the two accounts have been set up, customers can enjoy a seamless transaction process.
On top of this, customers enjoy discounted rates from both companies. Payability takes a maximum fee of 1.5% for customers who take advantage of the partnership, instead of the standard rate of 2%, while OFX offers preferential pricing for customers who are also with Payability.
Perhaps one of the biggest benefits is the fact that customers can use Payability with OFX as if it was a local bank account. This means they can pay suppliers, vendors, and local taxes in their local currency, avoiding unnecessary bank fees, bank wire charges, and exchange rate costs on transferring to their home currency and back.
What’s next for the Payability and OFX partnership?
In the future, Payability plans to offer their Instant Advance service to international customers who are selling to the U.S. market through Amazon.com. This will allow sellers to access a capital injection to buy more inventory, launch new products, and get better deals from their suppliers.
The eventual aim is to offer both the Instant Advance and Instant Access services to international customers selling on all international marketplaces.
At the moment, customers are required to sign up for each service separately, but the goal is to streamline this process so there are fewer steps involved.
Looking forward: are fast, next-day payouts the future?
For international Amazon sellers struggling with the two-week payout time-frame, this new partnership might be the solution they’ve been waiting for.
The combination of fast, next-day payouts and lower exchange rates means sellers marketing products beyond their home countries still have the opportunity to grow quickly.
Lower exchange rates and fees make cross-border selling more appealing, and this will continue to be a trend in the ecommerce world.
This article was sponsored by Payability.