Foreign Currency Borrowing for Sports Team Travel
Sports teams that travel internationally face a number of logistical hurdles, not the least of which is managing foreign currencies. Currency exchange is not an issue when a team performs solely within its own country, but when sporting events occur in multiple countries a solution is needed. This is where foreign currency borrowing can be of value.
What Is Foreign Currency Borrowing?
Foreign currency borrowing is used to speculate financially on currency exchange rates. The loan originates in a selected currency and has to be paid back in the same currency, adjusted for any rate changes. But there is a more practical use case, where a business or organization is engaging with multiple currencies in foreign countries. Foreign currency borrowing offers a way to overcome this challenge, foregoing the need to buy each local currency when traveling or doing business in a new country.
Why Do Traveling Sports Teams Borrow Foreign Currency?
A sports team and its players need a way to manage the complexity of transactions when crossing borders to compete. Teams are often forced to make business payments and use funds in a foreign currency, even for short stays in the country. With each trip to a new event, the local currency may also change every week or two. The question arises of how the team should pay expenses related to the event. It’s impractical to buy currencies weekly through traditional banks and it’s difficult to manage exchange rates and payments.
The easiest solution to this dilemma is through a foreign exchange partner that offers the option of borrowing the currency, holding it in an account, and then forwarding the payments as instructed. From one secure central platform, multiple currencies can be borrowed as needed, to simplify payment of business, travel, and shipping costs.
Reduce Equipment Shipping Costs
Most sporting events are reliant on equipment arriving on time at a reasonable cost. If a team has significant equipment to ship, this can be a large expense payable in the local currency. Using a foreign exchange partner ensures timely payments at a favorable exchange rate, reducing costs, and preventing delays.
Send Large Volume Payments
The benefit of foreign currency borrowing is enhanced when large volume payments are needed to pay businesses. With large payments, a foreign exchange partner is indispensable, minimizing differences between exchange rates and guaranteeing transparency. There is also a need for reliable transaction security for verifying rates and payments.
Increase Available Funds in Multiple Currencies
Sports teams have an easier time with travel and payments when they don't have to use traditional banking channels. It is an advantage to have a flexible, single foreign exchange account with access to multiple currencies. Athletes on the team can benefit as well when the foreign currency is borrowed and paid out, as they don't have to “buy” the local currency. This is both a convenience and a necessity, considering the tempo and distractions for sports teams that travel.
4 Considerations for Foreign Currency Borrowing
When selecting a foreign exchange partner there are a few points for evaluating service quality. Not every provider can cover the full spectrum of needs for seamless foreign currency borrowing and payments.
1. Currency Exchange Rates
Exchange rates can affect the overall cost of cross-border payments, so this should be prioritized. The provider must be able to offer competitive, real-time currency exchange rates, especially in smaller markets where rates may be volatile. Rates should be calculated and known prior to borrowing so the full cost of payments is known.
2. Ease of Sending Payments
It is optimal if the provider has an online platform that is easily accessed and navigated for sending and receiving payments. This allows for maximum visibility, saves time, and identifies potential costs of payments. The platform must have features that safeguard both user identities and funds.
3. Available Countries and Currencies
A sports team could potentially travel to dozens of countries in a single season and will require complete international service coverage. The foreign exchange provider should be able to service most countries and currencies so that one partner can be used and the sports team does not have to deal with multiple providers.
4. Global Payment Compliance
Foreign currency exchange is a highly regulated international market, and any provider must be in compliance in each jurisdiction where they offer exchange services. This will include system security management, licensing, insurance, and audit procedures. A provider’s compliance measures and global reputation should be evaluated carefully, as a team does not want to have any interruptions in payments or access to currencies.
Travel Smarter With a Foreign Exchange Partner
Premier Sports Network partners with a leading global payment service that actively work in the sports industry with foreign currency borrowing strategies. Our partner understands the demands placed on sports teams who travel internationally and transact often in foreign currency. The payment and exchange services offered by our partner meet all global regulatory compliance standards.
Contact us to learn more about how Premier Sports Network’s foreign exchange partner can assist your team with its international currency and payment services.
