Updated on December 13, 2018
Deliverable foreign exchange providers are essentially specialist in helping businesses and individuals process and manage their currency requirements in a proactive and measured way. They typically assist clients who are needing to transfer large or regular amounts of currency to facilitate this in a competitive way and savings of anything up to 5% on the amount being sent can be anticipated.
Once registered with a foreign exchange company, clients will enjoy much better levels of guidance that are typically offered at retail banks. Often banks will only offer a day rate and large currency transactions will only be able to be booked over the counter at a local branch.
A specialist provider will be able to offer a much more in-depth view of the market, and importantly have a much greater knowledge of the markets and upcoming economic releases which could be either detrimental or beneficial to your transfer. Clients can also request to be contacted and kept abreast of any developments.
Transfer fees from FX specialists can vary but are typically between £5-£10 however many companies offer the added bonus of offering their ad-hoc transfers for free meaning clients can enjoy drastically improved rates and reduced or no transfer fees. Banks charges tend to range from £10 to £30 for a higher priority transfer.
Whilst clients will have to decide whether switching from a Bank to a specialist FX provider is worthwhile. Anybody who is considering making International payments either on a regular basis or for a significant one-off transfer will almost certainly experience a saving and although setting up an account will take a few minutes out of your day the market insight and saving will prove worthwhile.
FX providers tend to have a significant focus on the private client sector with their clients typically electing to use their services in order to transfer money for property and investments. Many will utilise FX services when acquiring a second home in the sun or relocating. Once relocated their maybe ongoing payments such as salary and pension payments.
Expatriates that are paid in another currency will need the services in order to revert currency to the local denomination. Although clients can use for multiple uses including; payment of a destination wedding, luxury holidays and overseas car purchase or student fees for children studying or interning internationally.
FX services become even more relevant for businesses. Many businesses will either invoice internationally or purchase raw materials or products from overseas. Although banks tend to act more proactively for businesses, SME’s can sometimes be forgotten with a focus being allotted to larger corporations and businesses.
FX payments providers have many ways for their clients to trade, including app’s and online platforms ensuring small business owners get great service and pricing. Business owners tend to enjoy the fruits of a proactive account manager, the ability to hedge contracts and generally a more proactive approach to their FX exposure. Plus have the added benefit of saving on both the FX spread and reduced transfer fees.
Businesses that might be used to making hundreds if not thousands of small regular payments can also benefit from improved services levels. Traditionally these payments would have needed to be entered by a payments clerk or admin assistant, sometimes taking days to create a payments batch. Leading FX providers possess systems that allow businesses to intuitively make thousands of payments at the click of a mouse, reducing fees, improving their FX and rate and critically reducing the time spent on making these payments dramatically.
Sectors that can typically benefit from these include the travel industry, royalty companies and payroll businesses. Although any business that makes batch payments with over 50 beneficiaries can immediately see an improvement and reducing the time spent on making international payments.
The last 20 years have seen the emergence of superpowers such as Amazon and eBay and whilst the UK Highstreet slowly slips into obscurity the number of online retailers or E-Tailers as they are known multiplies. These E-tailers immediately have access to a global market and therefore will have clients paying in a multitude of currencies. The E-tailer is then faced with an FX exposure which will eventually need to be converted to back to the E-tailers base currency.
Some FX providers now offer wallet accounts which enable to online sellers to collect payments in a number of currencies and also have the functionality of being able to use these funds to pay for their own goods or services. For example, an online retailer might receive payments in US Dollars and has the ability to use these funds to purchase goods overseas, using the Dollars they have accrued from their sales.
Whilst banks appear to be future proofing their businesses with more functional and advanced technology it still remains exceptionally hard to get personal or tailored service when making overseas purchases or transfers.
Typically banks will insist that clients must make large overseas currency purchases in Branch. Consumers currently find many bank branches closing at a rate of knots making quickly popping to the branch a challenge. Especially if you are located in a more rural location. Other banks simply don’t have the appetite to service this requirement and clients will find very little in the way of guidance. Insurance, Bank accounts and credit cards prove much more lucrative and will, therefore, remain a focus and key revenue generator.
Banks that do have a telephone dealing service will rarely offer the depth of Foreign exchange contracts and risk management tools that a specialist FX provider will be able to, these contracts can be highly beneficial to companies with regular large international payments or clients who are for example purchasing a property overseas and have the time to benefit from rate movement.
If you are purchasing overseas in a foreign currency and would like to see if you could benefit from the guidance of a foreign exchange provider, please email [email protected].