What is a Unique Transaction Reference (UTR) number?

17-12-2020 | treasuryXL | XE |

Making a bank transaction or money transfer to or from India? Then you’ll need a UTR number. Here’s what it is, what it does, and how to find yours.

If you’ve ever made any inter-bank transactions in India, you’re probably familiar with UTR numbers. If you haven’t but plan on making transactions in the future, this number is a key ingredient that you’ll need if you want to make any kind of money transfer. So, what exactly is a UTR number and why is it important to your transactions?

What is a UTR number in India?

In India, “UTR number” means Unique Transaction Reference number. This number is used to identify a specific bank transaction in India. All banks in India use UTR numbers for all types of money transfer. Every UTR number is unique and each is generated to identify each fund transfer. UTR numbers in India are generated by the banks that initiate the transfer. You can easily use the UTR number to track the status of your transactions.

How do I find a UTR number?

Where exactly can you find your UTR number for each transaction? All you have to do is look at your bank statement for your UTR number. The UTR number is listed as “Ref no.” just below each transaction details. UTR numbers in India often look like this:

XXXXR7310682908954385XX

The few characters of each UTR number usually vary depending on the bank that generates them.

One of the quickest and most convenient methods of getting a specific transaction’s UTR number is from your account statement. You can easily download or just view this statement via your bank’s mobile app or internet banking. The UTR number is the 22 or 16 characters usually next to the transaction date.

What’s the importance of a UTR number in India?

The importance of a UTR number in India is to recognize and keep an eye on financial transactions. Banks can use UTR numbers to help you track your fund transfers if they are delayed, stuck, or if you intend to refer to any previous transaction for whatever reasons.

For instance, if you send some amount of money to someone and he or she claims the money wasn’t delivered or the amount was different, the bank that facilitates the transaction can use the UTR number to track it and to resolve the issue easily.

UTR numbers are generated in India when money is transferred between two banks. You can use two key methods to transfer funds between accounts held in various banks in India. The first is the National Electronic Fund Transfer normally known as NEFT. The other is the Real Time Gross Settlement known as the RTGS.

When you make NEFT or RTGS transactions in India, UTR numbers are generated. Though NEFT transactions aren’t processed instantly. Rather, they are processed in batches which means the fund transfer isn’t completed instantly. Currently in India, NEFT is done in half hourly batches from 8 a.m. to 7 p.m. on weekdays and working Saturdays.

In contrast, when you make a money transfer using RTGS in India, the fund transfer is processed instantly. As soon as you transfer funds via RTGS, the money is deposited to the recipient’s account within a period of two hours. As such, RTGS is the fastest process for transferring funds from one bank to another. Nonetheless, you can only use RTGS when the amount of money you’re transferring is less than Rs 2,00,000.

How to identify the UTR number of RTGS transactions

RTGS transactions UTR numbers are 22 characters long while NEFT transactions UTR numbers are 16 characters long. Each of the two types of bank transactions have a unique UTR number format. The UTR number format for RTGS transaction is:

XXXXRCYYYYMMDD########

Here’s a simple breakdown of the UTR number of RTGS transactions:

  • XXXX – indicates IFSC (this is the first 4 characters) and is the bank code of the sender

  • R – indicates RTGS system

  • C – indicates the transaction channel

  • YYYYMMDD – indicates the date of the transaction in this order: year, month, and day

  • ######## – indicates the sequence number

How to find the UTR number of a NEFT transaction

As we mentioned earlier, you can find the UTR number of any transaction by checking the detailed account statement via the online banking section of your bank. So, how can you see the UTR number of a specific NEFT transaction? All you have to do is click on the transaction details or narration. You will see a detailed description of the said transaction.

You can easily identify every type of transaction by the format of their UTR number. As we mentioned earlier, the UTR number of NEFT transactions is 16 characters long. You can easily use the UTR number of a NEFT transaction to track the status of the transaction.

How to use a UTR number to track your transaction status in India

If your NEFT transfer is delayed, you may check the status of the transaction by using the UTR number. Or in the event that your account has been debited for a specific transaction but the recipient is yet to receive the fund, you can easily contact the bank’s customer support asking them to track the transaction via the UTR number.

Another option is to reach out to your assigned Relationship Manager asking them to track the status of the transaction using the UTR number.

Here are other methods of tracking the status of your transaction using the UTR number:

  • Visit your bank’s mobile app or internet banking account

  • Check the previous transfer section

  • Search for the specific transaction with the UTR number

  • The status of the transaction will be displayed

 

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?

 

 

Visit XE.com

Visit XE partner page

 

 

 

What are BIC/ SWIFT codes, how do you find them, and how do they work?

Our guide will let you know about SWIFT and BIC codes inside and out, also for 2023!

To send or receive money internationally, your bank or any other financial institution must know where to send the money – but how do they know? Make way, for this is where a BIC/ SWIFT code comes into the scene! If you’ve ever initiated a money transfer with Xe or read our guide to sending money, you might’ve seen that you’ll need a BIC or SWIFT code. But what is that, and where would you find it?

Starting from what a SWIFT/ BIC code is and why you need it to how you can find it easily and use it for transferring money globally, our guide will let you know everything about this code inside out. Ready, get set, go!

What is a BIC or SWIFT Code?

BIC stands for Bank Identification Code, and SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications. Sometimes, people use the terms “BIC” and “SWIFT” interchangeably. A SWIFT code or SWIFT ID typically identifies banks and other financial institutions worldwide, for international transactions. More specifically, it says who and where these institutions are, so that your money goes to the correct place – you might even think of it as a global identity card for banks.

The International Organization for Standardization (ISO) recognizes and approves SWIFT codes for financial and non-financial institutions. Right now, there are over 40,000 live SWIFT codes in the world.

 

Read now: Top 3 Questions about Forex Answered


What does a BIC/ SWIFT code look like?

SWIFT/ BIC codes contain 8-11 characters that identify your city, country, bank, and the branch of your bank. The code may look something like this: AAAABBCCXXX

All muddled up? Let’s get this BIC format straight:

  • AAAA: 4-letter bank code that’s usually a shortened version of your bank’s name.

  • BB: 2-letter country code that represents the country in which the bank’s located.

  • CC: 2-character location code, pointing to the place where the bank’s head office is situated. It’s made up of letters and numbers.

  • XXX: 3-digit branch code that specifies a particular branch of the bank, usually the bank’s headquarters. These last 3 digits are optional, though.

To help you understand better, we’ve listed out the BIC/ SWIFT codes for a few large banks from around the world:

  • Scotiabank (Canada): NOSCCATTXXX

  • Charles Schwab Bank (US): CSCHUS6SXXX

  • Bank of England: BKENGB2LXXX

  • State Bank of India: SBININBBXXX

Why do I need a BIC/ SWIFT code?

If you want to send money around the world, you’ll almost always need to use a SWIFT/ BIC code. That’s because money transfers technically don’t actually transfer money around the world. Banks securely transmit information to one another through the SWIFT system or their other channels, which lets them know where the money should come from (which account should be debited), and which account should be credited with the money. In short, without this code, your bank won’t know where exactly they should send your money to.

So, it’s important for a bank on one side of the world to find the right bank on the other side, when it comes to international wire transfers, even when you use an international money transfer app like Xe, you’ll have to enter the BIC/ SWIFT code of the recipient’s bank for wiring money to the recipient, because the money will travel from your bank account to your recipient’s bank account.

How do I find my SWIFT/ BIC code?

You can find your SWIFT/ BIC codes with a few options:

  • Check the bank statements

You can usually find your bank’s BIC/ SWIFT code in your bank account statements. If you’re using an online bank, log into your digital bank account to easily view your bank statement.

  • Check the bank’s official website

Visit the bank’s website and check their Frequently Asked Questions (FAQs) section, international wire transfers, and other related links for their BIC/ SWIFT code. If there’s a search feature on the website, enter “SWIFT code” in the search box.

  • Contact your bank

In case you still can’t find the BIC/ SWIFT code, reach out to your bank via live chat, phone, social media, or email.

How do I verify a SWIFT code?

When sending or receiving money, always cross-check the BIC/ SWIFT code and other details with the recipient or your bank before you or the sender sends the money.

But why should you cross-check it?

As a matter of fact, if you enter a SWIFT code that doesn’t exist, the bank should reverse the payment you’ve made, and return your money. They’ll be charging a specific fee for that, though, and it might take some time before you get your money back.

As soon as it hits you that you’ve entered the wrong code to send money internationally (uh-oh), get in touch with your bank right away. They may be able to cancel the transaction, so keep your fingers crossed.

You can avoid such a scenario if you make sure that the BIC/ SWIFT code has:

  • No typing mistakes

You might think entering a SWIFT code is the work of a moment. But when you finally type it, character by character, it might seem as long as a marathon. Since it’s easy to make a mistake while typing in the code, try to copy and paste the code whenever possible.

  • The correct format

Always stick to the format of the BIC/ SWIFT code that the recipient has given you. For example, don’t type the country code before entering the bank code. And remember, there shouldn’t be any spaces between the characters in the code.

How do I transfer money using a SWIFT code via money transfer apps?

Once you sign up on online money transfer apps like Xe, you need to link your bank account directly to the app. After that, you can send money straight to the recipient’s bank account through a wire transfer, no matter where in the world he or she may be. You’ll usually have to follow these steps for wiring money between banks via Xe:

  • Log in.

  • Confirm which currencies you’d want to exchange. You can use Xe’s free Currency Converter tool for a quick check on the mid-market rate.

  • Enter the amount you wish to send.

  • Enter the recipient’s name and address.

  • Enter the recipient’s bank details, including the BIC/ SWIFT code and the International Bank Account Number (IBAN) of his or her bank.

  • Choose your payment method and confirm the money transfer.

Is IBAN the same as SWIFT?

No, IBAN and SWIFT are 2 different codes, but both of these do the same job – sending or receiving money. Banks use SWIFT codes to identify bank branches for making international payments. On the other hand, IBAN codes specify individual bank accounts for both domestic and international payments.

  • Do I need an IBAN number or a SWIFT code?

It depends on the country to which you’re sending money. For example, banks in the US, Australia, and New Zealand don’t use IBAN numbers, but they use SWIFT codes for different banking services.  But if you’re wiring money to a country within the Eurozone, you’ll surely need a SWIFT/ BIC code along with an IBAN number.

 

Is a SWIFT/ BIC code the same as a sort code?

Nope, sort codes aren’t the same as SWIFT codes. Sort codes are 6-digit codes that help British and Irish banks to identify bank branches for domestic payments (payments within a country).

  • Do all banks use BIC/ SWIFT codes?

No, all financial institutions, especially some small banks and credit unions, don’t have SWIFT codes. Instead, these institutions contact banks that do have BIC/ SWIFT codes, and ask them to serve as intermediaries for wiring money. You might also come across some financial institutions that use SWIFT for only a certain number of their branches, and not all of them.

Is a SWIFT code the same for all branches?

It depends on the recipient’s bank. Some banks may have one BIC/ SWIFT code for all their branches, while others have unique SWIFT codes for each of their branches. Plus, since all the branches of a bank may or may not use the SWIFT network, the code usually specifies the bank’s head office or primary office. So, are you ready to make an international money transfer using a BIC/ SWIFT code? Download the Xe app or sign up today!

 

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.

 

 

Visit XE.com

Visit XE partner page

 

 

 

What’s the difference between a neobank and a challenger bank?

19-11-2020 | treasuryXL | XE |

The biggest difference between neobanks and challenger banks is the presence or absence of a banking license, but it’s not the only difference.

Most banks began looking into online services shortly after 9/11 brought air travel to a sudden and screeching halt. They wanted a way to move money which did not involve placing paper checks on airplanes. Internet-based banking, or mostly internet-based banking, was the next logical step. According to some recent market research, neobanks and challenger banks will be worth over $470 billion USD by 2027. Frequently, people use these terms interchangeably. However, there are some significant differences between neobanks and challenger banks. Challenger banks are mostly online, and neobanks are exclusively online.

Neobank vs Challenger bank

But while the presence of physical locations (and lack thereof) is an important distinction between neobanks and challenger banks, it isn’t the only difference between the two bank types. There are several differences to note, as these differences often have a direct bearing on which one is best for your family or business.

Difference #1: physical presence

Think of it like this. Many retailers, like Walmart, have both a physical and an online presence. Other retailers, like Amazon, are exclusively online. Challenger banks and neobanks are basically the same. But the Walmart comparison only goes so far. Most challenger banks only have a handful of physical locations, as their online services are their main draw. Furthermore, most of these physical locations are in the UK. After the 2008 financial crisis, the government opened the market to new banks.

Neobanks, on the other hand, first appeared in 2017 as a way to fill the niche between traditional banks and FinTechs. Less than four years later, there are hundreds of these institutions in the UK, U.S., and worldwide.

Difference #2: accounts, products, and services

There are some other differences as well. Typically, challenger banks offer both personal and business accounts. Moreover, challenger banks streamline their products and services, so they can be more internet-friendly. Challenger banks are small institutions which “challenged” the Big Four UK banks (Barclay’s, Lloyd’s, HSBC, and RBS). Their technology-based services and commitment to markets traditionally under served by the Big Four quickly attracted legions of customers.

While neobanks do offer some personal accounts and services, they usually target small and medium-sized businesses (SMEs) and business startups. They present themselves not just as banks, but as online financial technology firms, and typically appeal to more tech-savvy customers.

Difference #3: banking license

What’s the difference between a psychiatrist and a psychologist? It’s not their sense of humor, or lack thereof. Psychiatrists can prescribe medication, and psychologists can only provide therapy.

That’s also the major difference between challenger banks and neobanks. Most challenger banks have such a limited physical presence that they are essentially 100 percent online. But challenger banks have banking licenses and neobanks do not. So, only challenger banks can offer a full range of financial services. That includes things like issuing credit cards and loaning money. Neobanks can offer these services as well, but only if they are tied to a licensed institution.

There is some overlap. Many neobanks essentially began as FinTechs. Then, once regulators approved their banking license requests, they became challenger banks.

Some examples of top challenger banks and top neobanks

Formed in 1995, Richard Branson’s Virgin Money is one of the oldest challenger banks in the UK. It also has locations in Australia and South Africa. Between 2007 and 2010, Virgin Money also operated in the U.S. A private equity group began Aldermore in 2009. The online institution bought Ruffler Bank a few months later, so the neobank became a challenger bank almost overnight. Aldermore is also the poster boy of this sector’s growth. South African financial conglomerate FirstRand recently bought Aldermore for a staggering £1.1 billion.

Durham, England’s Atom Bank was the UK’s first online financial institution to tailor its platform to tablets and smartphones, as opposed to PCs. It was also the first 100 percent digital bank to receive a banking license. Shortly thereafter, international banking giant BBVA acquired a large stake in Atom Bank. As a result, it expanded its financial services to include residential mortgages, competitive savings accounts, and secured business loans.

Founded in 1996, First Internet Bancorp was one of the first FDIC-insured, state-chartered financial institutions in the United States with a 100 percent online presence. It mostly offers retail services, like checking accounts, and securities investments. Customers also have access to installment loans, personal lines of credit, and other financial services. Chetwood Financial Services is an example of a limited challenger bank. It offers most financial services, with the exception of residential mortgages. Regulators do not allow CFS to issue any buy-to-let residential mortgages. Civilised Bank, which is now known as Allicia Bank, is in the same boat. It offers a single financial product, a twelve-month savings account, by virtue of a limited Part 4a UK license.

In 2010, General Motors Assurance Corporation, GM’s financing arm and a free-standing financial services company, became Ally Financial. Not surprisingly, Ally focuses on auto leasing and financing. It has close to five million such customers. In 2016 and again in 2019, the company significantly expanded its mortgage lending business. Ally is affiliated with Via, an online vehicle auction site.

San Francisco-based Good Money sends half its profits to social justice and environmental preservation groups. Accountholders cast ballots to decide where Good Money invests. The bank offers a range of FDIC-insured products, mostly DDA checking and savings accounts. As of January 2019, there was a waiting list to be a Good Money customer. All new customers also have the option of purchasing a stake in the company. Credit Suisse X is the online arm of the venerable Zurich-based investment bank. Its online banking services are targeted to individuals with high incomes. Online financial institutions are more able to go after specific market segments.

Use Xe to make international money transfers

Neobanks and challenger banks are good options for customers who want an all-online or mostly-online experience. But they are not a very good option for international money transfers. Traditionally, bank fees are rather high in this area, and you may not get the best exchange rates for your transfers.

Money transfer providers, such as XE, are neither neobanks nor challenger banks. Xe does not try to be all things to all people. Instead, we focus on electronic funds transfers in general, and international electronic funds transfers in particular. We have worked very hard to develop a platform that’s both convenient and secure. As a bonus, we are also able to offer fast money transfers (some taking just a few minutes) and competitive exchange rates.

 

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.

 

 

Visit XE.com

Visit XE partner page

 

 

The Most Common Questions About Money Transfer

22-05-2020 | treasuryXL | XE |

If you’ve never made an online money transfer before, the process can get a little confusing. From where your money’s actually going to what you’ll need to make the transfer, it may seem like there’s no shortage of complicated processes or details to remember. And if you’ve tried doing some online research, you might have felt buried by all of the information.

Planning on making a transfer soon? Let us make it simple for you. Here are the answers to some of the most common questions our customers have about the transfer process, so that when it comes time for your transfer, you won’t be held up by any last-minute concerns.

What is money transfer?

The term money transfer is a broad term that refers to any payment that doesn’t involve cash. It typically comes in two forms:

  1. Payments, such as direct deposit or swiping a debit card
  2. Transfer, such as wire transfer or online money transfer (which is what we’re talking about today)

Unlike traditional payment methods, money transfer doesn’t involve any physical exchange of money. Instead, it’s a secure exchange of information between two institutions (typically banks) that lets them know how much to take from your account and credit to the recipient’s account.

How do I make a transfer?

If you haven’t opened an account, that’s the first step. You can learn how to register in our blog here. Once you’ve signed up, here’s what you’ll need to do:

  1. Let us know what currencies you want to transfer between and how much you want to transfer;
  2. Let us know the recipient’s name and bank account information so we’ll know where to send the transfer;
  3. Enter your own payment information so we’ll know where to deduct the money from;
  4. Double-check that all of the information is correct and that you’re happy with your rate, and then confirm your transfer.

Do I need to provide any documents?

On some occasions, we may require additional documentation to verify your identity. In that case, all you’d need to do is log in to your account and provide a copy of one of the following:

  • Driver’s license
  • Passport
  • National ID

If you’re transferring a large amount of money, you may also be asked to provide verification of your source of funds. In that case, you would upload that document (typically a bank account statement or a property sale document).

The whole process will be quick and simple: if we need extra documentation, we’ll let you know by email within 24 hours of you confirming the transfer.

What countries and currencies can Xe help me transfer to?

We can transfer money to over 130 countries in every major global currency.

Will the transfer cost me anything?

Depending on the method you use to pay for your transfer, you may be charged a small service fee. However, there are no hidden fees in our transactions: everything will be clearly laid out when you initiate your transfer.

Where does my rate come from?

Our rates come from live data from the global foreign exchange markets. Since they’re updated in real time, the rate you quoted in the morning might not be the same rate you get if you try again later that evening. There are no added margins or hidden fees inside our exchange rates: you can trust you’re getting the true, honest rate.

Check out this previous blog for more information on what impacts exchange rates and how we get ours.

How do I provide money for the transfer?

There are three ways you can pay for your transfer:

  1. ACH direct debit
  2. Wire transfer
  3. Credit or debit card

Depending on which method you pick, there could be a slight difference in the cost of the transfer and how long it takes to complete. Take a look at this blog post for more information on the three payment methods.

How long will the transfer take?

Our transfers typically complete within 1-4 business days, though many of them reach their recipient sooner than that.

And you won’t be left to wonder when it’ll arrive. When you make the transfer, we’ll tell you when the transfer will be sent as well as the expected arrival date before you confirm the transaction, and receive email confirmations throughout the process.

Can I cancel or edit my transfer after I’ve confirmed it?

Yes, but the earlier the better. If you need to change or cancel your transfer, contact us by phone as soon as possible.

If you do need to cancel, there is a chance that you may incur an additional cost. This is because we purchase the currency at the time of your confirmation. Depending on how much time has passed, if the currency’s value has fluctuated, there could be a difference in the rate when we sell it back to the market. This is where the potential for extra cost comes in.

How does Xe keep my money and information safe?

We have been in the currency business for over 25 years, and keeping our customers’ money and information safe is one of our top priorities. We are owned by the multibillion dollar, NASDAQ listed company Euronet Worldwide and adhere to regulatory standards in every country that we operate in, along with having enterprise-grade security measures in place.

We hope this information has answered any lingering questions and given you what you need to move forward with your planned transfers. Ready to send your transfer?

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multibillion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.

 

 

Visit XE.com

Visit XE partner page

 

 

 

 

Source

What are BIC/ SWIFT codes, how to find them, and how do they work?

03-01-2022 | treasuryXL | XE | LinkedIn |

Just booked a rooftop hotel in Manhattan? Or bought an authentic Chinese vase at an auction in Hong Kong? When making an international payment, you need payment details such as BIC (also known as SWIFT address), the country code and IBAN. Not sure where to find this key ingredient to an international money transfer? Our guide will show you all there is to know about SWIFT and BIC codes.

Your bank or other financial institution must know where to transfer money to send or receive money worldwide, but how do they know? Make way, for a BIC/ SWIFT code is about to enter the picture! If you’ve ever used Xe to send money or read our guide on sending money, you’ve probably noticed that you’ll need a BIC or SWIFT code. But what exactly is it, and where would you seek for it?

From what a SWIFT/ BIC code is and why you need one to how to find one quickly and use it for international money transfers, our guide will teach you everything you need to know about this code. It’s time to get ready, get set, and go!

What is a BIC or SWIFT Code?

BIC stands for Bank Identifier Code, and SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications. Sometimes, people use the terms “BIC” and “SWIFT” interchangeably. A SWIFT code or SWIFT ID typically identifies banks and other financial institutions worldwide, for international transactions. More specifically, it says who and where these institutions are, so that your money goes to the correct place – you might even think of it as a global identity card for banks.

The International Organization for Standardization (ISO) recognizes and approves SWIFT codes for financial and non-financial institutions. Right now, there are over 40,000 live SWIFT codes in the world.

What does a BIC/ SWIFT code look like?

SWIFT/ BIC codes contain 8-11 characters that identify your city, country, bank, and the branch of your bank. The code may look something like this: AAAABBCCXXX

All muddled up? Let’s get this BIC format straight:

  • AAAA: 4-letter bank code that’s usually a shortened version of your bank’s name.

  • BB: 2-letter country code that represents the country in which the bank’s located.

  • CC: 2-character location code, pointing to the place where the bank’s head office is situated. It’s made up of letters and numbers.

  • XXX: 3-digit branch code that specifies a particular branch of the bank, usually the bank’s headquarters. These last 3 digits are optional, though.

To help you understand better, we’ve listed out the BIC/ SWIFT codes for a few large banks from around the world:

  • Scotiabank (Canada): NOSCCATTXXX

  • Charles Schwab Bank (US): CSCHUS6SXXX

  • Bank of England: BKENGB2LXXX

  • State Bank of India: SBININBBXXX

Why do I need a BIC/ SWIFT code?

If you want to send money around the world, you’ll almost always need to use a SWIFT/ BIC code. That’s because money transfers technically don’t actually transfer money around the world. Banks securely transmit information to one another through the SWIFT system or their other channels, which lets them know where the money should come from (which account should be debited), and which account should be credited with the money. In short, without this code, your bank won’t know where exactly they should send your money to.

So, it’s important for a bank on one side of the world to find the right bank on the other side, when it comes to international wire transfers, even when you use an international money transfer app like Xe, you’ll have to enter the BIC/ SWIFT code of the recipient’s bank for wiring money to the recipient, because the money will travel from your bank account to your recipient’s bank account.

How do I find my SWIFT/ BIC code?

Don’t worry, you have a few options.

  • Check the bank statements

You can usually find your bank’s BIC/ SWIFT code in your bank account statements. If you’re using an online bank, log into your digital bank account to easily view your bank statement.

  • Check the bank’s official website

Visit the bank’s website and check their Frequently Asked Questions (FAQs) section, international wire transfers, and other related links for their BIC/ SWIFT code. If there’s a search feature on the website, enter “SWIFT code” in the search box.

  • Contact your bank

In case you still can’t find the BIC/ SWIFT code, reach out to your bank via live chat, phone, social media, or email.

How do I verify a SWIFT code?

When sending or receiving money, always cross-check the BIC/ SWIFT code and other details with the recipient or your bank before you or the sender sends the money.

But why should you cross-check it?

As a matter of fact, if you enter a SWIFT code that doesn’t exist, the bank should reverse the payment you’ve made, and return your money. They’ll be charging a specific fee for that, though, and it might take some time before you get your money back.

As soon as it hits you that you’ve entered the wrong code to send money internationally (uh-oh), get in touch with your bank right away. They may be able to cancel the transaction, so keep your fingers crossed.

You can avoid such a scenario if you make sure that the BIC/ SWIFT code has:

  • No typing mistakes

You might think entering a SWIFT code is the work of a moment. But when you finally type it, character by character, it might seem as long as a marathon. Since it’s easy to make a mistake while typing in the code, try to copy and paste the code whenever possible.

  • The correct format

Always stick to the format of the BIC/ SWIFT code that the recipient has given you. For example, don’t type the country code before entering the bank code. And remember, there shouldn’t be any spaces between the characters in the code.

How do I transfer money using a SWIFT code via money transfer apps (like Xe)?

Once you sign up on online money transfer apps like Xe, you need to link your bank account directly to the app. After that, you can send money straight to the recipient’s bank account through a wire transfer, no matter where in the world he or she may be. You’ll usually have to follow these steps for wiring money between banks via Xe:

  • Log in.

  • Confirm which currencies you’d want to exchange. You can use Xe’s free Currency Converter tool for a quick check on the mid-market rate.

  • Enter the amount you wish to send.

  • Enter the recipient’s name and address.

  • Enter the recipient’s bank details, including the BIC/ SWIFT code and the International Bank Account Number (IBAN) of his or her bank.

  • Choose your payment method and confirm the money transfer.

Is IBAN the same as SWIFT?

No, IBAN and SWIFT are 2 different codes, but both of these do the same job – sending or receiving money. Banks use SWIFT codes to identify bank branches for making international payments. On the other hand, IBAN codes specify individual bank accounts for both domestic and international payments.

  • Do I need an IBAN number or a SWIFT code?

It depends on the country to which you’re sending money. For example, banks in the US, Australia, and New Zealand don’t use IBAN numbers, but they use SWIFT codes for different banking services.  But if you’re wiring money to a country within the Eurozone, you’ll surely need a SWIFT/ BIC code along with an IBAN number.

Is a SWIFT/ BIC code the same as a sort code?

Nope, sort codes aren’t the same as SWIFT codes. Sort codes are 6-digit codes that help British and Irish banks to identify bank branches for domestic payments (payments within a country).

  • Do all banks use BIC/ SWIFT codes?

No, all financial institutions, especially some small banks and credit unions, don’t have SWIFT codes. Instead, these institutions contact banks that do have BIC/ SWIFT codes, and ask them to serve as intermediaries for wiring money. You might also come across some financial institutions that use SWIFT for only a certain number of their branches, and not all of them.

Is a SWIFT code the same for all branches?

It depends on the recipient’s bank. Some banks may have one BIC/ SWIFT code for all their branches, while others have unique SWIFT codes for each of their branches. Plus, since all the branches of a bank may or may not use the SWIFT network, the code usually specifies the bank’s head office or primary office. So, are you ready to make an international money transfer using a BIC/ SWIFT code? Download the Xe app or sign up today!

 

 

 

 

 

 

Your guide to UTR codes (with a UTR number example, how to get a UTR, and what to do if you lose it)

23-09-2021| treasuryXL | XE |

Whether you want to find a UTR and use it, or you’re lost in a maze thinking of what you should do if you lose the number, we’ve got your back with a UTR number example and more!

A Unique Taxpayer Reference (UTR) number is a code that identifies you or your business in the United Kingdom for tax purposes. Her Majesty’s Revenue and Customs (HMRC), a UK government department, is responsible for collecting taxes in the country and uses your UTR number whenever it deals with your tax.

You may need a UTR for submitting a tax return to HMRC, depending on whether you meet their eligibility criteria.

Feeling foggy already? Whether you want to find a UTR and use it, or you’re lost in a maze thinking of what to do if you lose the number, we’ve got your back, so take it easy!

We’ve also thrown a UTR number example into the bargain to help you understand all of this better. Let’s get the (UTR) show going, shall we?

What’s a UTR number example?

All UTRs have 10 digits, which sometimes end with the letter ‘K’. A simple UTR number example is 12345 67890, with a gap between 2 pairs of 5 digits each.

Do I need a UTR number?

If you have forms of income or expenses that require you to file a Self Assessment tax return, you’ll need a UTR number. This applies in case you:

  • Are or were self-employed as a sole trader and you earned over £1,000 GBP (without claiming tax relief) in the last tax year (April 6 to April 5), or

  • Are a partner in a business partnership (even a nominated partner will do), or

  • Have untaxed income (like commissions, income from renting out a property, or foreign income), or

  • Want to claim an Income Tax relief, or

  • Are a subcontractor who’s either self-employed, a partner in a trust or partnership, or the owner of a limited company in the UK (in all these cases, you’ll have to register for the Construction Industry Scheme or CIS).

In the case your sole income is from your wages or pension, you won’t need to send a return.

However, keep in mind that if you submit your tax return to HMRC 3 months (or more than 3 months) later than the deadline, you may face a minimum penalty of £100 GBP, along with interest on late payments of your tax bill.

How do I find out my UTR number?

First things first, register for a tax Self Assessment, if you have to send an income tax return. You can either register online, or fill up an application form on the HMRC website, print it out, and post it to HMRC.

Once your registration process is complete, or you’ve formed a private limited company in the UK, HMRC will send you an SA250 “Welcome to self-assessment” letter.

You’ll find your UTR number on the top right of the letter, along with a 12-digit activation code (for non-personal tax accounts). This activation code is necessary for signing in to your online self-assessment account with HMRC for the first time.

In case you don’t receive the activation code, though, or you lose it within 28 days of enrolling for the online service, you can sign in to your online HMRC account and simply ask for a new code.

If you’d already registered for the self-assessment and sent a return online before, your UTR should be on your previous tax returns, payment reminders, return filing notices, and other official documents from HMRC like P45 and P60.

Look out for a 10-digit number under “Tax Reference”, just like the UTR number example we’ve included at the beginning of this article.

How long does it take to get a UTR number? 

HMRC automatically issues a UTR number as soon as you register for Self Assessment or you set up a private limited company.

You’ll get a letter from HMRC with the UTR number within 7-10 working days for UK addresses, but it can take up to 21 working days, too, if you’re based abroad.

How can I get my UTR number online?

After registering for tax self-assessment and creating your online account with HMRC, you can find your UTR number online.

Log in to your HMRC account for viewing your tax returns and UTR. Plus, it has become easier now to check your UTR number online via the official HMRC app.

Is my UTR number on my payslip?

If you’ve got a payslip or PAYE coding notice that HMRC sent you, you should be able to find your UTR number there.

By the way, don’t worry if the payslip is 10 or 20 years old, as the UTR number won’t change, ever.

How much tax do I pay with a UTR number?

Let’s assume that you’re a subcontractor working on a couple of construction projects in the UK. Before your contractor can pay you for the first time, he or she must check whether you’re registered for self-employment as well as for CIS.

If the contractors find your UTR on HMRC’s list of CIS-registered subcontractors, they’ll deduct tax at a flat rate of 20% from your payments and pass it on to HMRC.

But if you haven’t given your UTR yet to your employers, or they can’t find your UTR number on the list of CIS subcontractors, they must deduct 30% tax from your pay instead. So, whether you’re living in the UK or abroad, registering for CIS is a smart idea.

You can even apply for gross payment status at the time of the CIS registration process, if you want contractors to pay you in full, without any tax deductions.

Can I have 2 UTR numbers?

No, you’ll get only 1 UTR number, whether it’s a personal UTR or one for a limited company in the United Kingdom. Even if you own multiple companies, each of those will get 1 company UTR number in the UK.

Is UTR the same as National Insurance (NI) number?

Nope. An NI number is a reference number for the country’s social security system.

You have to apply for an NI number when you’ve just turned 16 and you’re working in the UK, applying for a student loan, or you want to claim tax and other state benefits.

In fact, HMRC asks for your National Insurance number and other personal details when you register for self-assessment to get a UTR.

Can I file a tax return without a UTR number?

Long story short, no. You’re definitely going to need your UTR when you submit a self-assessment tax return for the first time.

What if I’ve lost my UTR number?

If you’ve lost or forgotten your UTR number, you can easily recover it from an HMRC document.

But when you can’t get hold of any such documents either, you can ask for your UTR by calling the Self Assessment helpline on a UTR customer service number given below:

  • 0300 200 3310 (if you’re in the UK)

  • 0300 200 3319 (if you’re in the UK)

  • +44 161 931 9070 (if you’re abroad)

It’s also possible to request Corporation Tax UTR from HMRC, in case you’ve got a private limited company in the UK.

For that, you’ll have to provide HMRC with your registered company name and your company registration number (CRN). HMRC will then send the UTR to the business address you had registered with Companies House.

How to contact HMRC for UTR-related and other queries

Apart from the phone numbers we’ve listed above, you can also get in touch with HMRC via:

  • Online videos and webinars. These are available for queries regarding the self-assessment.

  • Twitter. Start your tweet with the tag @HMRCcustomers for general support (please don’t mention your UTR number or any personal info, as it’s a social platform).

  • Webchat. A “speak to the adviser” link will appear whenever an adviser is available, so click on that link immediately. If you don’t, you’ll have to wait till another adviser gets available.

  • Post. Write to HMRC at this address: Self Assessment, HM Revenue and Customs, BX9 1AS, United Kingdom. You don’t need to include a city name, PO box, or street name here.

What about Unique Transaction Reference numbers?

Unique Taxpayer Reference numbers aren’t the only UTR numbers out there. You may also see the acronym refer to Unique Transaction Reference numbers. While the two numbers share an abbreviation, they are two very different things with very different uses. Unique Transaction Reference numbers are unique codes meant to help banks identify and recognize financial transactions in India. Keep an eye on this space—we’ll discuss these numbers in greater detail in a future blog post!

If you’re paying UK tax while you’re based overseas, you’ll need to make international payments to HMRC. And when you’ve got the Xe money transfer app and website at your service, you can heave a sigh of relief.

International money transfers with Xe are fast, safe, and as easy as ABC.

 

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ listed parent company, Euronet Worldwide Inc., has a multi billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have a truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you detailed information.

 

 

Visit XE.com

Visit XE partner page

 

 

 

Why might you use a market order?

09-09-2021 | treasuryXL | XE |

If you’re making a payment in a volatile market and aren’t operating under a deadline, you may want to consider a market order for your next money transfer.

If you need to send money overseas, sending it on the spot and crossing your fingers for a good rate isn’t your only option. (Thank goodness!) There are several ways to get the most out of your foreign exchange transfers, whether you’re hoping to get it done by a certain date or get the best possible rate. One of such is the market order, and it’s available to everyone. But what exactly is a market order and how does it work?

What is a market order?

Remember how we described forward contracts as the “buy now, pay later” transfer option? Market orders would be the “buy now, transfer later” option.

When you make a market order, you can specify your target rate at which you’d like to exchange your currencies. The current rate doesn’t matter: the markets are constantly moving, and you’ll never know when your desired rate will be live.

After you’ve placed your market order and set your target rate, your work is done, and now it’s up to the markets. Once your rate is live, your currency will automatically be purchased, allowing you to transfer currency at your ideal rate.

Why use a market order?

The foreign exchange market is volatile and unpredictable. Nonetheless, you can monitor the market and come up with a clear-cut currency strategy that allows you to get the most out of your foreign exchange transactions, without having to constantly check the rates.

With a market order, you can easily set an exchange rate you want for your currency and once your target is met, the transaction is initiated automatically. This gives you the opportunity to get the highest value for your currency regardless of how volatile the market is.

Key things to note about a market order

  • It allows you to customize your market order by setting the amount, exchange currency, value date, and validity.

  • You can choose a desired target exchange rate to either stop-loss, make -profit, or get the best of both.

  • Your market order triggers automatically once your target rate is reached.

  • Since the process is automated, you’re not required to keep monitoring the market for the best rates.

  • You can sit back and relax without bothering about the volatile nature of the foreign exchange market!

A market order allows you to get the best out of sending money at your most preferred exchange rate and to prevent the undesirable effects of the unstable foreign exchange market. Once you set a market order, the online money transfer platform such as Xe monitors the foreign exchange rate movement, automates and completes the transfer on your behalf once the set rate is reached.

It’s an opportunity for you to benefit from an automated foreign exchange management system with minimal exchange rate risks.

When should you use a market order?

You can use money order just about any time you want. However, certain situations make a money order the preferred choice for sending money. Here are the most preferred periods to use a money order:

  • To get the best of higher rates

  • To save money and time

  • To make the most of foreign exchange purchase

  • To create a safety net

  • To get the most out of your budget

  • To take advantage of favorable exchange rate

  • To manage foreign exchange risk

Depending on the currencies you want to transfer and what’s going on in the world at the time, your currencies could be subject to quite a bit of volatility. If you’re contending with frequent market motion, setting up a market order can help you to ensure that you’ll be able to make your transfer at the best possible rate, whenever that may be.

Market orders are also a great option for transfers that aren’t time-sensitive. Some transfers (such as bills or educational payments) need to be made by a certain date, but if your transfer doesn’t come with its own hard deadline, you can take advantage of market orders to make the most of your money in your transfer.

Why should you take note of currency risk management?

Managing the risks associated with the volatile nature of the foreign exchange market is important to get the best rates for your money transfer. This is one of the key reasons why the market order is such a good option. Here are key reasons why you should consider currency risk management using a market order:

  • All your foreign transfers will be based on strategic decisions.

  • You’ll be able to forecast your international expenses.

  • You’ll know precisely what foreign exchange range will be used for your transfer.

  • You’re not required to keep monitoring the market to get the best rates.

  • Market order is automated so you aren’t bothered about missing the best rates.

  • You can use the volatile nature of the market to your advantage.

Is a market order the best option if your transfer is date-focused?

No.

Unlike several other available money transfer methods, a market order isn’t the best option if you intend to transfer your money within a specific date. That’s if your money transfer has a deadline.

For example, some payments such as overseas mortgage, school fee or an emergency medical bill require payment within a specific period. Once you miss such a deadline, you’ll have to deal with the consequences that follow.

In such situations, a market order isn’t the best method for transferring your money. However, if your transfer doesn’t require any deadline or specific dates, a market order could be your best bet. Market orders are mostly suitable for money transfers that aren’t time-sensitive. It provides a perfect opportunity to sit back and wait for the best market rates before your transfer goes through.

How do I create a market order?

Ready to set up a market order? It’s no more complicated than sending any other money transfer. If you don’t have an account, take just a few minutes and sign up for your free account first. If you’re already registered, visit our Money Transfers page to learn more about how you can get started.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you the detailed information.

 

 

Visit XE.com

Visit XE partner page

 

 

 

Identifying Types of Fraud/Scams

26-08-2021 | treasuryXL | XE |

Knowledge is power. When it comes to avoiding scams, forewarned is forearmed. Here are a few common types of scams that criminals will use to try to steal your money or – more importantly – your identity.

1. Give Money to Get Money

If you ever receive an “official” notification that you’ve won a lottery or that someone wants to generously give you a large sum of money but first you need to send money to cover taxes, fees, clearances, or some other cost before collecting your prize, proceed with extreme caution!

The common thread with this scam, apart from the too-good-to-be-true offer, is that you must “act now” or respond immediately to the official sending the notice. This scam relies on you feeling pressured to not miss out on the deal or prize.

One of the most well-known versions of this type of scam is the Nigerian Prince (also known as the 419 Scam).

2. Phishing

Phishing is almost what it sounds like. Someone is fishing – and using bait – to obtain sensitive information to steal everything from the cash in your bank account to your identity.

Phishing scams replicate official-looking emails (or other communication types) from well-known and reputable companies. These fake emails include links or phone numbers encouraging you to change passwords or send personal documents and information (to update your account). The email will make some claim that there is an issue with your account (i.e. you need to supply documents to receive funds being remitted to you) and you need to click on the link provided to fix the problem. These links may take you to a look-alike site created by the criminals or contain malware (malicious software) which can give the criminals access to your computer (so don’t click!). Phone numbers may work the same way by directing you to a fake answering service.

There are a number of sub-species of the Phishing scam:

a) Spear Phishing

Spear Phishing is a little more sophisticated as it specifically targets you and relies on the trust you’ve built around a person, company, or brand. Most likely the communication will be personalized. Criminals target you from information they have found on sites like social media.

b) Clone Phishing

Clone Phishing differs in that it will copy a legitimate email that included an attachment or link. The attachment or link is replaced with a fraudulent version and the email is sent from a disguised address that appears to come from the original sender. The email may claim to be just a resend of the original or even an updated version.

c) Whaling

Whaling goes after the “big fish”. It targets senior executives or high-profile people within in a company. This type of fraud usually appears as a legitimate concern such as a legal request or subpoena, client issue, or corporate matter.

d) SMiShing

Cute name, not so cute fraud tactic using text or SMS. Potential victims receive an unsolicited text or SMS message with a link to a site that can contain malware or viruses. The urge to click is usually based on a “confirmation” of account activity and the risk of incurring additional charges or fees if the intended victim doesn’t take care of the problem immediately (by clicking the link).

3. Fear-Based (Service Cut Off/Jail Time)

You receive notification, usually through email or phone, that your account is in areas and you need to pay the balance immediately or have the utility service cut off. This type of fraud includes claims of unpaid taxes requiring immediate payment to avoid jail time. Criminals in this case are dependent on your fear of losing a necessity, like heat or water, or your personal freedom.

Conclusion

The ultimate goal of the criminal is to rob you. Criminals will try every sneaky tactic to get what they want and will play upon your fears, your generosity, or your trustfulness to get it.

Scammers attack when you’re least expecting it and often prey on the most well-intentioned people. Educate yourself on how to protect yourself and your loved ones from unexpected fraud. Here are several resources that provide helpful information:

Remember, no matter who is contacting you, NEVER give them any of your passwords, account numbers, or personal information without double-checking their identity first.

Be smart, be aware, and be safe!

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you the detailed information.

 

 

Visit XE.com

Visit XE partner page

 

 

 

How to set up a forward contract and lock in a rate for your business

12-08-2021 | treasuryXL | XE |

A forward contract gives you and your business certainty, allowing you the peace of mind to have confidence that your international exposures are taken care of.

At Xe, they work with businesses of all sizes across many industries. They recognize that each business has its own requirements for its payments, and thus do they offer a diverse suite of money transfer products and solutions in order to meet each business’s international payment needs.

Let’s say that you’ll need to make a payment in the future. Right now, the rates are in your favor, but your payment is weeks or even months away, and you’re worried that the rates could change in the coming weeks, which would make your upcoming payment much more expensive than it would be now. You can’t influence the markets, but is there anything you can do to avoid feeling the brunt of currency market volatility?

In that case, the forward contract would be the right solution for you. Let’s take a closer look at what that is and how it could help your business.

What is a forward contract? 

A forward contract is an agreement to buy or sell an asset at a specified price on a specified future date. In the context of money transfer, this is how it works:

  • You specify which currencies you’d like to exchange, and get a quote at the current exchange rate.

  • You select the date on which you’d like to send this transfer, and provide all necessary recipient and payment information.

  • On that date, the transfer will automatically trigger, and will convert and send at the previously established rate.

You could think of it as the “buy now, send later” money transfer option. You’ll do the work of setting up the transfer now, and your currency exchange will happen at the current exchange rate, but the transfer itself won’t happen until the date you’ve specified.

Why is a forward contract useful? 

A forward contract can be useful in two ways: allowing you to lock in your rate to avoid future volatility, and to ensure that your payment will be sent (and delivered) by a certain date.

Changes in currency values can dramatically impact the cost of your business money transfers. If the currency that you’re sending weakens, or the currency you’re transferring to strengthens, a simple payment could suddenly become much more costly for your business. A forward contract gives you and your business certainty, allowing you the peace of mind to have confidence that your international exposures are taken care of.

Additionally, if your payment needs to be delivered by a certain date, arranging your payment in advance can ensure that it will be sent on time. No matter how busy things get leading up to the transfer date, you can rest assured that your payment is taken care of.

How to set up a forward contract 

If you’re interested in setting up a forward contract and securing a rate for your business’s upcoming money transfer, give them a call to set that up with our team. If you don’t already have a Xe account, take a look at their guide to registering for a business account.

Get Started

Get in touch with XE.com

About XE.com

XE can help safeguard your profit margins and improve cashflow through quantifying the FX risk you face and implementing unique strategies to mitigate it. XE Business Solutions provides a comprehensive range of currency services and products to help businesses access competitive rates with greater control.

Deciding when to make an international payment and at what rate can be critical. XE Business Solutions work with businesses to protect bottom-line from exchange rate fluctuations, while the currency experts and risk management specialists act as eyes and ears in the market to protect your profits from the world’s volatile currency markets.

Your company money is safe with XE, their NASDAQ-listed parent company, Euronet Worldwide Inc., has a multi-billion-dollar market capitalization, and an investment grade credit rating. With offices in the UK, Canada, Europe, APAC and North America they have truly global coverage.

Are you curious to know more about XE?
Maurits Houthoff, senior business development manager at XE.com, is always in for a cup of coffee, mail or call to provide you the detailed information.

 

 

Visit XE.com

Visit XE partner page

 

 

 

#4 Having No Insight into the Variety of Products Available for your Company (Dutch item)

05-08-2021 | XE |

Many companies are not aware of the total range of possibilities for the management of Currency Risks. For example, they only buy the necessary currency at the current rate, spot rate, and think any other strategy currency speculation. Hedging in particular is often misunderstood and therefore rejected. currency hedging is not gambling how the currency markets might behave in the coming days and weeks development, but is intended to insure the company against the possibility of unfavorable developments.

“Valutahedging is niet gokken hoe de valutamarkten zich de komende dagen en weken zouden kunnen ontwikkelen, maar is bedoeld om het bedrijf te verzekeren tegen de mogelijkheid van ongunstige ontwikkelingen.”

Er zijn diverse valutahulpmiddelen die u kunt gebruiken om dat te doen, maar laten we termijncontracten eens als voorbeeld nemen. Met deze transacties spreekt u af om in de toekomst een bepaalde hoeveelheid valuta tegen een vaste prijs te kopen. Neem bijvoorbeeld een supermarktketen die over een maand €10.000 moet betalen aan buitenlandse leveranciers. Een termijncontract dat vandaag specificeert hoeveel pond de keten voor die €10.000 zal betalen, elimineert het risico dat het pond de komende weken in waarde daalt waardoor de supermarktketen meer zou moet betalen dan verwacht. Dat is geen valutaspeculatie of gokken hoe de markten zich gaan ontwikkelen, het is
een verzekeringspolis.

Achteraf kan natuurlijk blijken dat hedging niet nodig was geweest. Als in ons voorbeeld het pond niet daalt ten opzichte van de euro of misschien zelfs stijgt, kan de supermarktketen denken dat het onverstandig was om van tevoren een koers vast te leggen. Maar dan zouden ze hedging beschouwen als speculatie en niet als een verzekeringspolis. Zo heeft u er aan het eind van het jaar ook geen spijt van dat u een opstalverzekering hebt betaald terwijl uw huis niet is afgebrand. Dat wil niet zeggen dat hedging de juiste strategie is voor alle bedrijven. Sommige zullen van mening zijn dat hun valutarisico niet zo groot is dat het dit soort verzekering nodig heeft. Maar dan nog moet u er niet vanuit gaan dat uw valutaprovider niet meer kan doen om uw bedrijf te helpen met uw valutabehoeften.

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