One of the main reasons we do not break our currency services down into categories or sectors, like so many of our peers, is because we think that the needs of a business or a private client, when categorised based on the reason for a currency exchange (the reason you might make a payment), can mean that the broader uses of our work get overlooked.
If we list the many different ways in which currency brokers can be used then the risk is always run that we do not list your particular reason/use, which, in turn, may mean you conclude we do not assist with it.
Hence, we choose to describe things like the practical ease with which someone (anyone, whether they are someone in your accounts team, or an individual sending payments for whatever reason) can make or send a payment.
Strategies for approaching currency activities are applicable across all payments regardless of the reason you're engaging in such activities, so, in this post we look at what steps and approaches you can adopt to ensure you get the best rate, exchange at the best time and do not leave yourself and/or your business unduly exposed to a drop in the value of the currency you hold - which would result in you getting less for your money or paying more.
1. Compare your currency broker.
All 'good' currency brokers should provide you with a rate derived from the live market.
Companies that provide you with rates 'for the day' are not giving you a price reflective of the real-time value of your money.
To get a live and useable rate of exchange you tend to need to be registered with the business you're enquiring with. It is quite a simple process to register with a currency firm.
These days we, currency brokers, can verify you and your business electronically, which means we tend not to need additional supporting information like documents to confirm your identity or your address etc.
In casees where you have been asked to supply documents simply to register with a currency company, you needn't worry. These documents are standard and only requested because we cannot get sufficiently strong an electronic 'score' or match to trace your identity and whereabouts from the information you provide in your application document.
Prime Cap enables you to register as a customer online, so, if you have questions or concerns about the information you need to submit, we invite you to look through the application document before proceeding:
Registering with more than one currency company means you can have more than one quotation.
You might find you do not have time or are not interested in registering with more than one firm; whilst that is totally understandable, it is equally understandable that this limits your ability to gauge how competitive the broker you're talking to might be.
Remember, even though you register with a firm, you are not committed to sending them any money unless you ask them explicitly to buy currency for you. Registering is not a commitment to transact.
To be fair, logging in to more than one online system or sending more than one email might not be practical, especially in instances where you're content with what you have been told by the broker you're talking with.
In that case we invite you to compare us to your bank.
It is always useful to us to know that you have compare our rate because it means we can, if we are the institution you choose to use, be confident in the level of competition we are offering you.
If we have nothing against which to compare the rate we've offered you then, in theory, we are quoting 'blind'.
Whilst some clients like to put their chosen broker to the test, this is not the best way to get the optimum rate.
Telling your broker what they need to beat means the broker can be forthright, saving you time. If the broker identifies the fact that they cannot affordably beat the institution against which you are comparing them, then both parties have saved time and if nothing else you can be confident you are getting good, if not optimum, value from the institution you're already using.
Prime Cap endeavour to ensure that we will not be beaten on price.
Making sure this is the case is usually done by discussing the current rate you get and then simply undercutting it. It stands to reason that if we do not know what to beat, we do not know how competitive we need to be and, in cases such as this, we will do our best to go at competitive as we can.
Each rate we quote is bespoke to the transaction we're presented with.
When you need the currency, what contract is best to use and what other channels you might have at your disposal will always feed in to the price we quote you.
So, if you are using your bank to exchange currencies and you share this fact with us, we can confidently provide a price that we know will be more competitive for you.
2. Work out when you need your currency by.
If you do not need to take receipt of the foreign currency you're buying, or if the invoice you're settling is not due for a number of days, weeks or even months, make your broker aware of this.
Whilst a currency broker should never say 'wait till tomorrow because the rate will be better' we can take a look at what is going on with the current global environment and, based on the relative strength or weakness of the currency you want, we can suggest an approach that could benefit you in the longer term.
If you have the money you want to exchange simply sitting in your bank account (whether you're a business or an individual) then, the fact that your payment mightn't need to be sent for 3 months means that, depending on where the current rate of exchange is, you do not need to withdraw funds from whatever interest bearing instrument or account you currently hold it in.
'Good' brokers will advise you on how to make sure that you're not adversely affected by a drop in the rate of exchange between today (for arguments' sake) and the day on which you need to pay the invoice (if you're a business).
We can explain to you the various triggers and actions that limit the extent to which you might be affected by a drop in the rate of exchange.
Whatismore, we can outline how you can lock in today's rate without actually having to pay for the booking until a date in the future - this is known as buying forward.
Buying forward it a particularly useful tool for businesses who know they have an amount to pay out in the future. It enables you to keep your capital in your own account until the time it needs to be paid and also it means that if the money you would use to fund such a currency purchase is not yet liquid, you can allow for it to become so between now and the maturity date of the contract.
High street banking institutions simply do not offer this sort of advice or contract. It is a very simply way for a business, or an individual with a structured payment to make, to fix the rate and therefore the margin on a purchase.