The challenge
Operating a global business
Marketing and managing a business across multiple territories comes with a host of challenges. There are language barriers and cultural differences for a start, but the need to move money around the world can often be just as daunting. Betcris is an online sports betting company, which was founded in 2006. Domiciled in Malta that company’s main market is currently Latin America, but expanding globally. This entails a huge marketing push, with a significant marketing budget allocated to advertising.
Betcris had no hedging strategy in place and was doing everything on the spot market. This meant it was vulnerable to the volatility of the currency markets with every transaction that took place. With the business expanding rapidly the potential for losses against budgeted figures was increasing. It was a risky approach. Further to this, incoming revenue funds were handled by PSPs (Payment Service Providers), and as a result the banks handling the payments were charging high fees. This represented a significant ongoing cost to the business and one which was visibly increasing as the business grew.
What Betcris needed was a reduction in fixed costs and a way of being able to budget for its overseas marketing and operational expenditure, mitigating the risks of currency movements.
The solution
Currency hedging provides control and certainty
The biggest immediate benefit the Convera team could provide was to introduce a reduced payment receipt service. With the reduction of fees on every incoming transaction, Betcris saw a dramatic improvement in revenues.
In order to address the company’s major concerns regarding currency volatility, the Convera team worked closely with Betcris to develop a risk management strategy. This meant the final cost for each marketing initiative would be fixed in advance and wasn’t subject to change, no matter what happened in the markets.
The results
Cost savings and mitigated risks
Betcris has been delighted with the immediate cost savings on incoming funds, and is already reaping the benefits of an effective hedging strategy. The ability to budget accurately for the costs of marketing campaigns, as well as operational expenditure, has has improved Betcris’ ability to forecast and track return on investment. This helps ease the stress of managing international payments, and saves time too, as there is no need to monitor exchange rates each day to identify the best time to transact. Ultimately, this frees up resources to concentrate on the real work of growing the business.
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