In the globalised world we live in today even some of the smallest businesses are exposed to foreign exchange movements. Many businesses suffer from poor exchange rates when paying international suppliers or receiving payments from across the world. Currency markets are constantly fluctuating and making your transaction at the right time can make a big difference to the amount of money you end up with.
Rishi Patel answers your questions:
High street banks are really not geared up to provide this kind of assistance as it is not their specialist area. On the other hand, experts in currency exchange who spend their time monitoring the markets, enable them to provide you with as much or as little information as you require.
Leaving the exchange rate to chance can be very costly, and failing to fix an exchange rate can sometimes mean that you can potentially wipe out profits for your business. Exchange rates can fluctuate by as much as 10% or more in just a matter of days, so it can have a substantial impact on the cost of your international transfer.
You can – either through buying a forward contract or through the use of market orders. Forward contracts can help protect against adverse currency movements and can be used to lock into favourable exchange rates. The market order guarantees a minimum exchange rate but allows you to take advantage by buying at a better rate if the market is favourable. This sounds more complicated than it is and it’s very simple to set up.
In a word, understand. There are endless ways to use the exchange rate fluctuations to your advantage but perhaps only a handful of ways that will suit your particular circumstances. Specialist providers such as The Currency Account are fully trained to understand your needs and suggest the most appropriate course of action to save you time and money.
The process of using a specialist foreign exchange company is actually easier than using a bank. We have plain speaking, dedicated experts and never use automated telephone answering systems. We will explain our services in jargon-free terms and ensure you understand how everything works. Our aim is to save you money, not to confuse you with market terminology. Many companies will also offer both online and offline options.
It is important to research the company that you’re thinking of using. Look for reviews from other customers and ensure the company is Authorised by the UK FCA.
Five things you need to know to improve your foreign exchange procurement process:
1. Don’t assume your primary bank is giving you a good exchange rate. Always consider what others, and specialist firms like financial technology providers, can offer.
2. One size does not fit all – a good partner for one company may not necessarily be the right partner for another company. Equally, review your partnerships every few years as your business grows – the right partner today may not necessary be the most appropriate partner for tomorrow.
3. Don’t only focus on the best exchange rate. Advice and service levels are equally important. Ensure you are working with a company that understands your business and can offer support by keeping you updated on currencies that impact your business.
4. If you are exposed to foreign exchange always consider approaching a specialist. Your bank may not necessarily be open to offering you the most appropriate products to eliminate risk.
5. Always ensure your foreign exchange provider is authorised by the Financial Conduct Authority. Check the FCA register to confirm their status. Most good companies will have a compliance and safeguarding document that summarises their procedures.
The Currency Account is a fintech multi-currency e-banking and international payments platform delivering solutions specifically designed to empower businesses and organisations that are trading internationally. Payments can be made to over 200 countries. The company also provides hedging and risk-management services for those looking to manage their currency exposure. The business is a trusted partner for a fast-growing portfolio of brands worldwide.
Authorised by the Financial Conduct Authority (FCA) under the Electronic Money Regulations & the Payment Services Regulations.
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