The second part in our guide to making the most of your foreign exchange payments.

Companies aren’t tied to their banks anymore and the reason is simple: specialisation and cost. The leading specialist foreign exchange (FX) companies on the market are pretty much a new phenomenon in the world of international trade, most being only a generation in the making.

They tend to be 100% focused on foreign exchange, offer their clients more attention than the banks, and comply with international regulatory authorities to a ‘T’ because all they do is foreign exchange.

Foreign exchange is the biggest business in the world with the big banks speculating on close to a trillion pounds every single day.

The largest specialty foreign exchange firms such as Custom House, Travelex and Ruesch move billions of pounds around the world annually, but these are real transactions as opposed to the speculative leverage that dominates the interbank foreign exchange market.

The incursion by non-bank specialists has really taken off in the last few years, helped by the launch of online foreign exchange trading such as Custom House’s Multiple Payment Platform.

These companies have global treasury operations and offer advantages to companies that are major exporters to Europe, Asia, the United States and other world markets. They handle billions of euros, pounds and dollars that they need to exchange. In turn, companies elsewhere in the world that import from America, for example, need those dollars to pay their bills.

Continuing on from last week, we look at some more of the services - tricks of the trade - that an experienced specialty foreign exchange provider will deliver.

Click ‘more’ for the details.

Market Intelligence
Foreign exchange markets are volatile.

A good FX partner will constantly monitor and analyse economic trends and shifts in real time to help companies stay ahead of the competition.

Trading specialists provide timely and informative insight and help them plan a foreign exchange strategy more effectively.

The better providers give their clients complimentary market intelligence with analysis of the underlying trends and events affecting international currency markets.

Forward Contracts
Because companies getting involved in foreign exchange are exposed to the fluctuations of the international currency market, an FX partner lets you lock in a rate today for delivery in the future.

Small shifts in exchange rates can affect your bottom line. With a forward contract, you receive a guaranteed exchange rate for currency to be bought or sold in the future.

A closed forward contract specifies an exact settlement date, while an open forward contract lets you settle the contract anytime within an agreed window.

Exchange Rate Bidding
Foreign exchange firms help you to reduce the risk of foreign exchange fluctuations, protect your profits and allow accurate, longterm budget planning.

They also let you settle foreign receivables or payables at the best price - always.

With an exchange rate bidding programme, trading specialists monitor international currency movements around the clock. They determine a target price with you and notify you when it has been reached and execute a transaction for you.

This allows you to take advantage of market currency shifts in multiple time zones and markets such as Tokyo, Singapore, London, Sydney and Hong Kong.

Online Services
Award-winning online services - such as those offered by Custom House - let you process payables and receivables in-house with real-time rates 24/7.

They integrate seamlessly with leading accounting and order fulfillment programmes to save you time and money. This makes everything easy, secure and accurate.

As part of the service, you can also be provided with complete reports on payment volumes and trends so that you can generate business intelligence and plan strategically.

Outsourcing Services
For many corporate customers, outsourcing services provide a complete global payment and foreign exchange back-up for their clients - including foreign currency transaction processing.

Outsourcing services can be a branded partnership agreement where you gain the benefits of the specialty firm’s reputation in the industry.

They should also offer an agreement that lets you use their international infrastructure to power your internal processing.

Think of them as your foreign exchange division and open up new business opportunities, protect your client list and save capital investment costs.

Next week we’ll begin to look at the growth of online foreign exchange trading platforms and how SMEs can take advantage of the latest tools in the marketplace to maximise their returns.

For more information on any of the above mentioned services contact Merseyside based Ian Meyer on 07932- 024893.

Business Leaders and Fortune 500 companies worldwide trust Custom House with its secure, award winning foreign exchange services. Over 50,000 clients transact more than US $15 Billion annually online and through the Custom House network of trading offices in United Kingdom, United States, Canada, Italy, New Zealand, Australia and Singapore.