Money matters – how to minimise foreign exchange cost and risk in music touring

There’s so much to think about when organising a concert tour: from arranging passports, visas and carnets through to the daily basics of sorting out food and accommodation, coping with climate and humidity and getting the laundry done. 

Sites like the Musicians’ Union and Tour Manager Info do a great job of describing the tasks and risks that need to be addressed. 

But, are currency exchange rates another item to add to your Things To Fix list? 

Very possibly. Last year, the GBP/USD exchange rate moved, from peak to trough, by 11%. Finding your net tour settlements are 11% less than expected can be a nasty shock when you sit back to do your final tour accounting. 

And it can be even worse than that. The exchange rate you receive from your bank or card company is often around 3% worse than the market rate.  

What can you do to minimise foreign exchange cost and risk for your artists?  

Here are out top three tips to get on top of this often hidden cost. 

1. Plan ahead to reduce exchange rate risk. 

Having a “currency strategy” may sound a bit overblown for a music tour, but the truth is – just like arranging visas, booking hotel accommodation and creating a gear manifest – a bit of planning can save a lot of cost and heartache. 

Creating a currency strategy simply means estimating what you will need to spend and what you expect to receive in each currency. When you know those cashflows, you can work with currency experts to reduce the costs associated with international transactions and minimise the risk that moving exchange rates knock a hole in your tour profits. That means your talent gets to keep more of their hard-earned ticket sales. 

For example, when you know the dates and venues your artist will be playing, you can estimate ticket sales and expected settlements (even if those estimates change). With the dates and the expected – let’s say US dollar – value of receipts along with the expected tour costs, a currency specialist can help you minimise the effect of exchange rates moving against you. With a series of flexible and relatively low-cost forwards (forward trades which set a fixed exchange rate) you can lock in the rate at which those USD receipts will convert into GBP.  

That means fewer nasty surprises at the end of a long, gruelling tour. 

Our guide, How To Develop Your Currency Strategy, discusses strategy in more detail. 

2. Match currency for revenue and expense with a multi-currency account. 

Common sense says you don’t want to convert money back and fore where you can avoid it. Every time you exchange currency or make a foreign payment, your bank makes a margin on the exchange rate, often as much as 3%. 

Many established artists have foreign currency accounts where they hold a balance of US dollars, Euros or whatever currency they need. These accounts can receive income or pay expenses as they arise, without requiring any further conversion. But keeping multiple, single currency accounts quickly gets expensive. The answer is a multi-currency account where you can hold and exchange balances in different currencies. 

For example, if you’re planning a tour of Europe, you could use an existing Euro balance to pay advance costs. Settlements could be paid in and held in Euros. Daily tour costs could be paid out of the Euro balance (either by wire transfer or using a card) and, after the tour, the balance could either be held for future expenses or transferred in a single sum to a local account. The same account could also hold US dollars for the American leg of the tour and receive Japanese Yen from a previous deal. 

This minimises the cost of frequent currency conversions and foreign transaction costs. A multi-currency account can also be used to receive other income such as royalties, streaming revenues or merch sales. 

The Centtrip multi-currency account can hold up to 15 different currencies in unlimited amounts and offers fair and transparent rates on exchange and payments. 

And, with the award-winning Centtrip app, you can stay in control of the finances of multiple, independent artists wherever you are. 

You can read more about the Centtrip account and platform, here. 

3. Use multi-currency cards to avoid foreign transaction fees 

If you use your domestic credit or debit card abroad, you’ll be charged a foreign transaction fee every time you use it, and you will probably suffer a poor exchange rate as well. Like banks, card issuers usually make a margin of around 3% on exchange rates and charge the foreign transaction fee as well. 

A better approach is to use a prepaid, multi-currency card. The card is pre-loaded with the currencies you require which means you always pay in local currency, wherever you are. 

If key members of the touring party have a card each, then you can stay in control of spending while ensuring everyone’s empowered to get the job done.  

The Centtrip prepaid multi-currency card provides expense management and cash management features, real-time reporting and the highest transaction limits on the market. Money can be transferred onto or off each card instantly, lost cards can be locked at the touch of a button, and limits, alerts and functions (such as ATM access) can be set at an individual card/cardholder level.  

Centtrip – 10 years on tour and on your side 

With over 10 years’ experience of supporting the world’s top touring artists, we’ve designed the Centtrip platform and card specifically for the needs of high-spending, internationally-mobile organisations like artists, film-makers and yacht operators. Centtrip supports over 500 of the world’s top artists including three of the top five highest-grossing tours of 2023. 

To read more about how Centtrip could support your artists, check out Centtrip.com/music.