Like-for-like settlement is a payment collection method by which an export company –normally an ecommerce business or an international retailer – receives payments in local currencies.
This settlement solution provides two major advantages. On the one hand, it allows the exporter to sell its products in the local currency of each market, which makes them more competitive, therefore increasing the company’s market share.
On the other hand, by receiving the payments in local currencies, the merchant company eliminates the conversion and settlement costs applied by its payment service providers and marketplaces, ultimately increasing its profit margins.
To implement this method, however, the company needs to be able to collect and hold cash in different currencies. This can be done through a network of bank accounts in each country (entailing burdensome set-up processes and maintenance costs) or simpler alternatives like Kantox’s Currency Accounts.
With Kantox’s Currency Accounts, merchants can easily collect and hold funds and send payments in 29 different currencies. Click here to know more: Solutions for ecommerce companies