Funds exchange is a very lucrative online business venture that you may want to pursue these days. Well, we all know that the internet has definitely changed the way we do business, and that includes sending and receiving payments. Unlike before, money transfers take days to complete, but now you can secure a transaction and see the money reflect in your bank account within minutes.
Well, if you may have noticed, there are a lot of escrow service providers that have spawned like mushrooms during the past few years, and they continue to compete for a bigger share of audience. The thing is, different people have settled for different escrow services, and because of this couldn’t complete transactions unless they use a common service the other party is using.
There’s actually one good way to resolve this kind of situation without switching from one escrow service to another, and that would be with funds exchange.
How it works
Funds exchange as an online business basically works this way. If you’re the exchanger, then you would have to set up an account on two different escrow services, such as PayPal and Payza (formerly AlertPay). You can render exchange services for people who want to transfer money from PayPal to Payza or vice versa, as doing this on their own is not really possible-unless they set up accounts for each, which could be a waste of time and effort on their end.
You can also do the same for those who wish to pay from PayPal to Egopay, Paypal to SolidTrust Pay, Paypal to Perfect Money , or from PayPal to Liberty Reserve (and the other way around).
Why it works
There’s actually a big market for funds exchange, and you will be dealing with both freelancers and online entrepreneurs. They usually seek funds exchange from one escrow to another because it would be inconvenient for them to withdraw money from PayPal and transfer it to their bank account, only to deposit the funds to Payza. It takes a few days for the whole transfer process to complete, not to mention the fees that are to be charged on their accounts. Seeking an exchange service may cost a few dollars more, but the speedy service makes it worth the price.
Where’s the profit
In the funds exchange business, your profit comes from the service charges of your exchange transactions, which is on top of the deductions that you will receive from PayPal, Payza, Moneybookers or Liberty Reserve. You may also take into consideration the foreign exchange rates, taxes and other fees charged by the escrow services to compensate for the your efforts in each and every transaction.
What you need to start
Like in any other business, funds exchange requires an overhead investment. You need a good sum of funds in the accounts that you’re going to open in order to accommodate exchange transactions, as you cannot perform the actual exchange process the long way. You need upfront funds to send to your customer’s PayPal or Payza account as your funds will come soon after.
Most importantly, you need the proper knowledge on how to transfer funds from Paypal to Payza and other escrow services, including their terms and conditions. This way, you are able to accommodate transactions without risking your clients’ funds.