Case study: Optimising our accounts
Some months ago I wanted to lower the financial service fees that impact us, merchant and payment service fees in particular. The success criteria was obviously ‘achieving lower financial fees’, and the sequence of events to lead us there was doing some research > identifying the desired merchant fees > contacting vendors to work towards them.
In the research phase, we discovered that one of our vendors (PayPal) had a simple, scalable process we could enroll in so as our transaction volumes grow, rates automatically go down. So we enrolled and instantly we began receiving a more preferable rate. It literally took us 5 minutes to start saving money.
We also discovered that the best way to lower our fees from a banking perspective was to avoid currency conversion fees. We knew we were being impacted by these fees but they were largely hidden from us. It was not until we went digging that we realized how much we were spending / losing in these transactions. Most banks don’t highlight these fees and if they do they are generally baked into the % rate which makes it even harder to track. Although it was not part of the initial plan, the next step was opening accounts in US dollars (USD) with our banking partners; now when anyone pays us in USD, the dollars get spent on payments we make to US-based services and team members. We also looked at the easiest and most affordable way to pay people in foreign currencies that were not € and USD, and this is where we started using Transferwise. So in a sense, we went from ‘how do we lower our financial fees’ to optimising many different aspects of our accounts receivables and payables, from the moment somebody pays us to the moment we pay someone else.
VP of Operations at Hotjar