Why foreign exchange is becoming increasingly important for your translation business.

Translators can boost their income by at least 5% by adopting a sensible FX strategy.

Foreign languages—yes. But many translators and small translation companies hardly give foreign exchange a second thought. Yet foreign exchange (FX) impacts almost every translation company and affects the income, in one way or another, of the majority of freelancers.

For many foreign exchange is a “hidden cost” of doing business iinternationally—and it is a factor that is becoming increasingly important as we continue to lurch headlong into the rapidly expanding global village.

Globalisation is unfolding at an unbelievable pace. It was only a few years ago when cross border transactions were the almost exclusive province of huge multinational conglomerates shipping commodities and products in bulk around the world. It’s now easier and cheaper for consumers in far away New Zealand to buy a book from the UK (with free shipping back to New Zealand) than it is for them to drive into town, park, and then try to find it in a local bookshop. Shopping involving foreign exchange is becoming an everyday experience.

The magnitude of the growth in cross border transactions can be seen in the following chart—in the first decade of this century, the amount of money converted from one currency into another grew from USD 2 trillion a day to 5 trillion a day!

The volume of international currency trades is growing at an unprecedented rate—and it’s not about to stop anytime soon. That includes you buying a subscription to an online service, a book or product from some other country via Amazon or accepting a translation job from a customer outside your own currency zone.

The ease of global trading at the retail level is not lost on translation buyers who increasingly are looking outside their own countries to buy translation services. From you! Freelancers and small translation companies are going to find that the proportion of their customers who want to pay in a foreign currency is going to continue to expand.

Smart translators, however, realise that there is a significant cost to doing international business—and that a good FX strategy is necessary to avoid unnecessary loses from exorbitant exchange rates and fees designed to make money from the unwary.

Neil Hamlin, a speaker at the recent ELIA Networking Days gathering in Malta, suggested that translators, LSPs and freelancers can increase their income by at least 5% by avoiding expensive international payment methods and by adopting a sensible FX strategy—TranslatorPay is a good way to get started!