Lately we have encountered an increased number of clients seeking information about the methods of international payment available. So we decided to compile a blog post listing the options!
Clients making currency transfers generally have three or four methods of international payment open to them. These are:
Spot transactions are the most common method of international payment. These are immediate and mean the clients funds are transferred almost instantaneously using the present exchange rate. High street banks though can sometimes take two or three days to complete a spot transaction so it’s worth speaking to currency brokers who – well – complete the transaction on the spot! In addition currency brokers rarely charge commission and can secure much more favourable exchange rates than high street banks.
Forward transactions are another common method of international payment. In these transactions the client agrees to fix the exchange rate based on the current market and then complete the transaction at a later date. This is useful because it protects the client in the event that the exchange rates drop. Of course exchange rates can also go up – so it’s worth asking guidance from a currency broker!
Limit order transactions are a nice method of international payment for clients interested in making a transfer once the exchange rates move about a certain point. Here the transfer is postponed until the exchange rates edge above a pre-agreed place – perfect for clients that want to get the best possible rates for their money.
Finally, stop loss transactions are the effective opposite of limit order transactions. Using this method of international payment a transfer only happens if the exchange rates falls below a certain point. This is useful if the client is concerned that the markets are unstable.
So there you have it! Next time you plan to make an international payment you know the options available.