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Foreign Affair

Anyone doing business overseas knows most banks and money exchanges charge an arm and a leg to convert foreign capital into greenbacks. The more global business you do, the larger the chunk of change. With the Web, home businesses are marketing products to potential customers from Athens to Zimbabwe. Still, converting foreign currency has been both time-consuming and expensive--until now.

Sonnet Financial's FX service has provided foreign-exchange services at a discount since 1992 for companies that move money across borders. The service pools smaller transactions into one larger sum, then shops around to find the best exchange rate. Pretty smart, right?

The idea came to Sonnet's founder and president, Gady Nemirovsky, at an airport in London. He was stunned by the fees he was expected to pay to change dollars into pounds and realized an automated pooling system would provide the bargaining leverage that is badly needed, especially by small businesses.

Using Sonnet, customers simply complete an online transaction form when they do business with a foreign client, and Sonnet then forwards them a check or transfers the money electronically. "Small customers don't have the clout to get the most favorable rates," says John Windsor, director of marketing at Sonnet.

Windsor notes that, in addition to traditional wire fees for international transactions, most exchange banks add a markup to the wholesale exchange rate and include other "hidden" fees. "Customers generally don't know how large of a markup they're being charged," he says. "Sonnet Financial FX is a tremendous value, especially for small businesses."

Of course, transaction fees are involved, but the charges are significantly smaller than those at banks and vary depending on transaction size--$40 for exchanges of $2,000 and under; $70 for those between $2,000 and $10,000; and a maximum charge of $150 for transactions of more than $10,000. Also, while Sonnet Financial FX proprietary software runs about $400, the service is available on the Internet ( for only the transaction fee.

Because the service is automated, small-business owners don't have to waste valuable time doing exhange transactions by phone, fax or on actual visits to their bank, according to Windsor.

"It's inefficient and time-consuming to do it by hand," he says, "plus Sonnet provides greater control for users. They don't have to go through so many fire drills."

Another valuable feature Sonnet offers is its forward contract service that allows businesses to lock in an exchange rate for shipments that won't arrive for weeks or months, thereby eliminating the risk of any unforeseen cost overruns due to fluctuations in the dollar.

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