Tag Archive for: expenses

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

 

 

COVID-19 vaccine rollout: how might it impact global currencies?

14-01-2021 | treasuryXL | XE |

As 2020 drew to a close, news broke of multiple vaccinations for the COVID-19 virus, and each nation began discussing its plan for distributing the vaccine.

At this time, we are still in the early stages of the vaccine rollout, and many nations around the world are still in the process of vaccinating their highest-priority individuals and preparing for the eventual larger-scale distribution.

As some start to dream about a return to life outside of lockdowns and social distancing, others are wondering what the news of the vaccinations—and their eventual distribution—could mean for major global currencies and economies.

Has anything recently impacted the US dollar?

Several recent happenings have led to an impact on the USD.

First, the dollar may see a very short term sentiment impacted by Donald Trump’s removal from office. President elect Joe Biden has stated that he will announce an economic plan on Thursday, 14 January, to navigate through the COVID-19 pandemic and an eventual reopening. While the specifics of this plan are not known at this time, we do know that this plan will be worth “trillions” of dollars and will entail massive infrastructure spend.

Recent minutes from the Fed have shown us that the US Central Bank quantitative easing (QE), and that interest rates will continue to be low for the foreseeable future.

Finally, U.S. treasury Yields recently rose to 10 month highs.

What does this mean for the dollar?

The above events resulted in an end to the recent weaker dollar. Instead, the dollar has been strengthening against its major trading counter parties.

How are other currencies being impacted by the vaccine roll out?

The sooner a nation can widely distribute immunizations, achieve herd immunity and therefore see its economy back and open for business, the better it will be for their economy and currency.

It is currently estimated that once 70-90% of the population has been vaccinated, the sooner lock down restrictions and the “handbrake” on the economy can be released. Because of this, markets are tracking the current vaccine numbers and the planned numbers in the weeks and months ahead as an indicator of which economies will bounce back and which currencies will strengthen first.

Currently, the US dollar and the British pound are poised to see positive change. As of January 8, 2021, the United States ranks 4th in the list of vaccination doses per country, with 2.02 doses administered per 100 people in the population. The United Kingdom ranks 6th, with 1.94 doses per 100 members of the population as of January 3, 2021.

On the other hand, as a result of Europe’s comparatively slow start to the vaccine roll-out, the Euro currently appears to be in a vulnerable position.

What can you do?

If the past year has demonstrated anything, it’s that one can never predict what may happen. The most important thing that you can do is ensure that you’re prepared for market volatility and market motion in all directions.

 

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

 

 

 

How FX Providers Can Help Prepare You for Market Motion

07-01-2021 | treasuryXL | XE |

Currency market moves caught you off-guard? You’re not alone. By working with a knowledgeable FX provider, you can minimize the effects on your business.

Woman looking at financial graphs

No matter when you check, the currency markets are constantly moving. Currency values are subject to drastic change seemingly at the drop of a hat.

Volatility in the financial markets isn’t random; changes in currency values are a direct result of real-world factors. Examples of the real-world events that can lead to increases and decreases in currency values include:

  • Natural disasters

  • Recessions

  • Inflation

  • Interest rates

  • Political happenings

It’s not uncommon for the markets to have slower periods of muted volatility, low interest rates, and steady returns in equity markets. But on the other hand, drastic changes can strike seemingly out of nowhere.

Volatility in the markets can have powerful, tangible impacts on businesses around the world. Corporate finance departments, treasury groups, CFOs, and business owners will be the ones left to face the consequences.

What could this mean for your business? Volatility in the markets can potentially:

  • Raise import costs

  • Reduce export sales margins

  • Make your product less competitive

  • Possibly disrupt your business plans for 2020 and beyond.

Manage FX risk with Xe

Your corporation doesn’t need to wait until the markets have already started moving to take action. FX volatility is a risk you can manage, and comprehensive FX risk management measures can help your organization to reduce the impacts of market volatility and account for future shifts in the market.

Many organizations lack FX risk management programs. Some feel that FX risk isn’t a major risk to their organization, while others lack the expertise or resources to implement the effective measures that their organization needs. Partnering with a knowledgeable FX provider can help your organization to manage its currency risk.

At Xe, we have been operating in the currency business for over 25 years as a knowledgeable authority. We have extensive knowledge of the markets and comprehensive product offerings including FX risk management tools to to help you and your corporation manage your currency risk with expert, tailored solutions.

 

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 to know about receiving a money transfer

24-12-2020 | treasuryXL | XE |

Just like sending one, receiving an international money transfer is quick and simple. Here’s what you’ll need to know about receiving your money transfer.

Need to send money overseas? You’re in luck. There is no shortage of resources available to help people send money electronically across national borders. And it’s understandable: this process is often cumbersome and difficult to understand.

Now, if you’re receiving the transfer? Not so much. There is very little out there to help recipients. It’s almost like companies assume that recipients are financially savvy and they already know everything, or that receiving a money transfer couldn’t potentially be confusing for a first-time recipient.

At Xe, we assume nothing. We’re here to offer step-by-step assistance for both senders and recipients. Our mission is to complete international electronic funds transfers as efficiently as possible, and make the process as quick and easy as possible for anyone who needs to do it.

We’ll go into further detail below, but here are the basics of what you’ll need to know as someone expecting an international money transfer:

  1. Have a bank account

  2. Provide the necessary information

  3. Wait for the money to transfer

  4. Watch your bank account

1. Have a bank account

A significant number of readers took a deep breath when they saw that requirement. About one in ten American adults do not have a bank account. They only use cash or they only use prepaid debit cards. These alternatives are usually just fine, but an electronic money transfer is different. No cash changes hands, and the paying party usually cannot add funds to a debit card.

Most of these people are able to open bank accounts. The minimum requirements are not terribly burdensome. Instead, fear keeps many of these people from opening accounts. They are afraid their credit scores are not high enough or they are subject to a bank account levy order.

Yes, many bank accounts, especially interest-bearing accounts, have minimum credit score requirements. These minimum requirements are also rather high. However, many banks also offer no credit check bank accounts. Typically, these banks do not run ChexSystem reports either. So, the current bank does not know if you owe money to another bank. These accounts usually have rather high fees and other stipulations. But, even if you have the world’s lowest credit score, a bank account is probably available (though bank account levies are another matter).

2. Provide the necessary information

Many people do not like to share their personal information with anyone for any reason. We understand that attitude; there are quite a few scammers out there. However, if you want to receive an money transfer, you’ll need to give the sender some information. We can’t transfer money if we don’t know where to transfer it, after all!

The requirements vary according to the transfer platform. If you’ll be receiving an Xe money transfer, your sender will need:

  • Your name and address. Use your legal name (the name connected to your bank account) and not the name you go by. Furthermore, most financial institutions require recipients to have physical addresses as opposed to post office box numbers. This is for security and anti-money laundering purposes.

  • Your country. A no-brainer, right? But there are two Chinas and two Koreas. Some people live in breakaway republics, such as South Sudan and Tigray, that are not universally recognized. Many also people live in disputed zones which are claimed by multiple countries, such as the India-Pakistan border. Bottom line: the country must match the sender’s financial institution’s records.

  • Your bank information. We need to know it so we know where to deposit the money. This data usually includes:

    • Your bank name

    • Your bank account number

    • A SWIFT or BIC code (which you can get with a quick Google search)

If possible, try not to send this information via unencrypted cell phone text message. Use email or something more secure. And don’t forget to double-check your information, especially account numbers. It’s very easy to transpose digits or make another minor error that could have a big impact. If that happens, you’ll need to wait even longer to receive the transfer, and odds are, that’s not what you want.

3. Wait for the money to transfer

Domestic transfers are usually almost instant. We get nervous if PayPal takes more than thirty seconds to move money. A few international transactions are almost that fast, but most take more time.

Currency conversion accounts for much of this delay. There are many different currency markets that convert U.S. dollars to Mexican pesos, Italian liras to Russian rubles, and so on. These markets charge different fees. Frequently, the transferring financial institution looks for the highest price, adds that fee to the transaction, uses a lower-priced market, and pockets the difference.

Not so at Xe. Our international funds transfer fees are entirely transparent. Nothing happens under the table. So, you know how much money you are going to receive before the sender actually sends it.

Network infrastructure also accounts for some delays. Many banks have excellent services for their local customers, but they do not handle very many international transfers. These transfers are often risky, largely because of the aforementioned international recognition and boundary issues.

Once again, these delays are usually not a problem at Xe. International funds transfers are all we do, so we know how to handle them efficiently and securely (another reason why international transfers can take a little longer—we’re ensuring everything is secure before we transfer).

Generally, Xe transfers require between 1-4 business days to complete (though most transfers are complete within 24 hours, and some take just a few minutes). That’s about the same speed as a domestic PayPal bank transfer.

But you won’t need to resort to guesswork. When your sender confirms their transfer, they’ll be given an expected completion date, and update that time estimate if necessary by email. The sender usually has the most up-to-date information, so check with them!

4. Watch your bank account

International transfers are entirely electronic. We typically send alerts to senders when we begin processing transfers, if there are any hiccups, and when the transfer is complete. We normally also send completion alerts to recipients, assuming we have a good email address.

The best way to know when a transfer is complete is to watch your bank account activity. Occasionally, recipient financial institutions place holds on these transactions, but that’s between you and your bank.

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

 

 

 

When Dealing with Foreign Exchange, Don’t Forget About Compliance

12-11-2020 | treasuryXL | XE |

What’s the most common problem in foreign exchange? It may not be glamorous, but one of the most common problems is regulatory delay—and it can have a major impact on your supply chain, cash flow, and relationships with suppliers and customers.

In the previous installments of our blog series on foreign exchange risk management, we’ve discussed several of the most common (and costly) mistakes that businesses make when making international payments and dealing with foreign currencies. Today, we want to take a closer look at regulatory compliance: what it is, what you need to do to be compliant, and what can happen to your business if you don’t take the necessary steps.

What do you need to know?

Financial institutions and other FX providers must comply with strict regulations while conducting foreign exchange transactions on behalf of their customers. Under know-your-customer (KYC) and anti-money laundering (AML) rules, they are required to verify the identities of all the parties they deal with, including the foreign parties with which your business may have contact. Additionally, there are overseas banking details to consider. While bank identifiers in the UK, for example, are standardised around account numbers and sort codes, the equivalents vary from country to country internationally. Depending on where you’re doing business, you may need to deal with data such as international bank account numbers (IBANs) and bank identifier codes (BICs).

The bottom line: your foreign exchange providers will legally require certain information so that they can transact on your behalf, and your business will need robust processes in place to generate said information and ensure that there aren’t any delays in business.

What happens if you don’t have the right policies in place?

Regulatory delay is one of the most common (and expensive) FX problems for businesses. If your business doesn’t know what it needs to do to be compliant and have policies and procedures in place to ensure that all business is up to regulatory standards, then you could see consequences. What’s the most likely outcome? Your payments won’t go through on time. Consider how that could impact your business, your cash flow, your supply chain, and your relationships.

What can an FX provider do?

If you’re not well-versed in everything you have to do to remain compliant while conducting business as usual, a specialist FX provider is the way to go. An FX provider can help you handle the various regulatory requirements and remain compliant in every country that you do business with.

For example, do you have online systems in place to automate data entry and quickly identify mistakes or missing information that may get in the way of your payments being made on time? Does your provider offer simple, easy-to-understand advice on the information you require from foreign counterparties and where to find it? Can you store payment details so you don’t have to keep re-entering them each time a transaction is due (and potentially leave room for human error)?

You don’t need to be an expert on regulatory compliance. However, if your business engages in any degree of foreign exchange, then you will need to pay special attention to regulatory compliance. If you don’t currently have the knowledge or resources to take care of compliance on your own, an FX provider is the way to go to ensure that your business won’t be disrupted by regulatory delay.

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 is remittance?

05-11-2020 | treasuryXL | XE |

Remittance payments, which are essentially sending money home, are easier than ever when you choose Xe.

In a nutshell, payment remittances are expatriates sending part or all of their foreign wages to friends or family back home. Technically, remittance can be defined as any such payments, whether or not the money crosses an international border. But in almost all cases, when people talk about money remittances, they are talking about financial transfers, usually wages, from a developed country to a developing country.

Many people are surprised to learn that developing nations receive more capital from money remittances than from any other source. For example, in 2018, low- and middle-income countries received about $345 billion USD in foreign aid and foreign investment. Financial remittances to these countries exceeded $525 billion USD.

Most of these remittances were transfers to individuals. Many countries, most notably India, China, and the Philippines, have large overseas diasporas. Additionally, many companies have more international connections than ever, making remittances more common.

When you choose a remittance of funds provider, convenience, cost, and security are usually the three most important factors. Xe remittances feature all these things. Our online portal, which features bank-grade security, is available to account-holders 24/7/365. Furthermore, we do not charge additional fees for many electronic transfers to one of the 130+ countries we are connected to.

What should you know about remittances?

The aforementioned convenience is the biggest remittance pro. Many transfers require only a few minutes. Additionally, the currency transfer is usually seamless. The sender transfers native currency, and the recipients usually gets the funds in native currency.

Largely because of the high volume of remittance transfers, there are occasionally calls for better regulation. Since many international transfers are under the radar, remittances are a popular tool for money launderers and terrorist financiers. For these reasons, FinTech companies like Xe keep a close eye on transfers to multiple different recipients or transfers to organizations instead of individuals.

On a related note, many people send money to groups, or join groups, which have hidden sinister agendas. Technically, these links run afoul of American and international laws and standards. But if your affiliation is tied to one specific aspect of that group, such as its support for refugees, you are typically okay.

High fees for small transfers are an issue as well. The average provider charges over 7 percent for transfers of $200 or less. That’s significantly higher than the average fee for larger transfers. Low income families are very vulnerable in this area. Seven cents out of every dollar is not much for wealthy families, but could be a week’s worth of gasoline for a poor family.

In addition to the fee, many countries directly tax remittance payments. These rules obviously vary significantly in different places. Additionally, even if the remittance is a gift, it is normally taxable income.

Understanding the Terms and Conditions

We won’t deny it: financial language can get a little dry. Frequently, remittance transfer agreements involve so much technical jargon that they appear to be in a different language. Here are some common remittance terms and what they mean:

  • ABA Number

    All American banks, and most foreign banks, have nine digit codes used in electronic transfers. If you do not know the ABA number, a/k/a the routing number, ask Google. You might also need your account number, and if you don’t know that, you’ll probably need to visit a branch in person.

  • AML

    As mentioned, money laundering is a serious problem in this area. So, many institutions have Anti Money Laundering protocols. These protocols usually involve transfer limits and transaction verification.

  • KYC

    Similarly, many institutions have Know Your Customer protocols. Common KYC items include text message verification, username/password authentication, and security questions, like your mother’s maiden name.

  • Recall

    If you transfer funds in error, it’s technically possible to cancel the transaction and retrieve the money. But the process is complex and there are no guarantees. So it’s best to get it right the first time.

The more comfortable you are with the lingo, the easier it is to send a remittance abroad.

How to send a remittance

Cash pickup, usually through a company like Western Union, electronic transfers, usually through a FinTech like Xe, and bank transfers are the most common forms of remittance payments.

In terms of the infrastructure, most remittances use Society for Worldwide International Financial Telecommunication (SWIFT) or Electronic Funds Transfer (EFT). Most cash and bank transfers use the SWIFT network. These transfers often involve a third party. These third parties do not work for free, so the fee could be higher. Xe and other online institutions normally use EFT transfers. Generally, these transfers are much more direct.

Cash pickup is usually the fastest and cheapest way to remit money overseas. It’s also the most cumbersome and least convenient way. Most recipients can only use cash for some in-person transactions. And, transferees must always travel somewhere to receive their money. On the other hand, bank transfers are extremely convenient. However, they are only available to certain people.

On the plus side, cash and bank transfers normally accept many different payment methods, such as cash, credit/debit card, cash, money order, wire transfer, or even personal check. These options normally require face-to-face transfers, as such payment methods are difficult or impossible to use online.

Xe remittances essentially combine the low cost and fast speed of cash transfers with the convenience of bank transfers. That combination makes Xe an excellent way to send money overseas.

 

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

 

 

 

US Election: how would Democratic and Republican victories impact the US dollar?

29-10-2020 | treasuryXL | XE |

Regardless of the winner, there will be motion in the currency markets. Are you prepared?

In just one week, the 2020 United States presidential election will draw to a close.

While many are making their predictions based on recent polling data, as time has shown (just look at the 2016 election), the polls are not definite, and the United States could conceivably see a victory for either Biden or Trump.

Whatever the result of the election may be, it will likely cause movement in the currency markets, and lead to changes in the value of the US dollar (and potentially other world currencies as well).

Volatility in the currency markets can dramatically impact individuals and businesses alike. Are you prepared for what could happen?

How will a Biden win affect the dollar?

In our previous post on the topic, here’s what we had to say:

Traditional wisdom would dictate that a Biden victory could lead to huge spending and tax increases which could see the Dollar weaken further, however many now believe that a safe and stable pair of hands for the US recovery from the COVID pandemic may just be the thing the Dollar needs to rebound.

Even today, you’ll see conflicting forecasts regarding a Biden victory. Some maintain that a Biden victory will lead to a drop in the dollar’s value. Earlier this month, the dollar fell to a nearly three-week low (its second straight week of downward motion), with many attributing its drop to increasing expectations of a Biden victory. Others believe that the greater uncertainty toward the Biden administration’s attitude toward the dollar may result in greater volatility.

However, others have stated that a Biden victory would be the “best possible outcome” for the dollar seeing as, between 1980 and 2016 (but excluding the 1984 and 2008 elections), the dollar rose an average of 4% following Democratic victory, as opposed to the average 2% jumps when Republicans were victorious. Additionally, many investors are reducing their bets on extreme currency market volatility in the event of a Biden victory.

What will happen to the Dollar if Trump wins?

After Trump’s victory in the 2016 election, the dollar did rise, and some predict that it will do so again. However, the US dollar Index has dropped more than 7% since his inauguration in 2017. Yet on the other hand, as stated above, the dollar does tend to strengthen immediately following a US presidential election, regardless of who wins (in fact, only 1 of the 10 elections since 1980 saw a drop). Many still predict a stronger dollar following a Trump victory, due to the administration’s support for fiscal stimulus as well as the fact that there would be less uncertainty in reelecting Trump over electing a new president.

What else?

Due to the much higher-than-usual frequency of mail-in ballots and early voting during this particular election, it’s possible that the winner will not be announced on Tuesday November 3, and will be delayed by a few days or more. A delayed announcement or a contested winner would extend the period of uncertainty, and almost certainly lead to a fall for the dollar.

 

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 US Election, the Dollar, and the Pound: what’s the forecast?

22-10-2020 | treasuryXL | XE |

Currently both election polls and the betting odds predict a clear lead for Joe Biden. However, it is important to cast your mind back to the night before the 2016 election when the same polls and odds had had Hillary Clinton as the clear favourite.

The United States presidential election is just over a few weeks away. For the US citizens, these last few weeks leading up to Election Day are going to be a whirlwind.

One of the areas that this election could have a major impact is on the value of the US Dollar. Earlier events this year such as the coronavirus pandemic have already led to fluctuations in the dollar’s value, and the election of a new president—and all that comes with it—could potentially lead to more.

What’s the forecast?

Currently both election polls and the betting odds predict a clear lead for Joe Biden. However, it is important to cast your mind back to the night before the 2016 election when the same polls and odds had had Hillary Clinton as the clear favourite.

The currency markets will have priced in a Biden victory to a certain extent, and therefore should Biden manage to displace the current president we could see a relatively muted reaction. If Donald Trump manages to hold onto the White House we could expect to see a
significant unwinding of positions that were based on an assumed Biden victory.

Traditional wisdom would dictate that a Biden victory could lead to huge spending and tax increases which could see the Dollar weaken further, however many now believe that a safe and stable pair of hands for the US recovery from the COVID pandemic may just be the thing the Dollar needs to rebound.

Looking at levels, the below Reuters FX Poll shows that markets are expecting the Pound to hold steady with a weakening US Dollar showing smart money targeting a level of 1.3000 at year ending climbing to 1.3400 by mid 2021.

How should businesses respond?

Nobody knows for certain where the markets could go next, and this uncertainty and volatility can have both a negative and positive impact on company bottom line, particularly where there is an exposure to USD.

With expert guidance from Xe, your business can confidently navigate the choppy waters of financial uncertainty.

In today’s volatile foreign exchange markets, we work harder to protect your business from exchange rate fluctuation. Our solutions are designed to take the uncertainty out of global
payments so you can stay focused on running your business.

  • Market Orders
    Flexible with your transfer time? Pick a rate and transfer automatically when the market hits your desired rate.

  • Forward Contracts
    Lock in a rate for future transfers. Transfer anytime at your locked rate within 3 years.

  • FX Options & Structured FX Products
    Bespoke solutions uniquely designed for your business needs, provided by our sister company, HiFM Limited.

  • FX Risk Management
    Currency volatility impacts your business. We deliver a risk management strategy to meet your specific objectives.

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 is a wire transfer, and is it the best choice for sending your money?

15-10-2020 | treasuryXL | XE |

At its simplest, the term “wire transfer” refers to the electronic transfer of money from one person to another, typically using a bank.

But this doesn’t mean wire transfer is just another term for “money transfer”. There are stark differences between money transfers and wire transfers.

Unlike online money transfers, wire transfers primarily use networks like the Society for Worldwide Interbank Financial Telecommunication (SWIFT) or Fedwire to transfer funds between banks. To make wire transfer (and why it’s different from online money transfer) crystal clear to you, let’s peek into the basics, such as how to wire money to someone, how fast it is, and whether it’s convenient (and to what degree).

What does it mean to “wire” money?

To wire money simply means to electronically transfer it from a sender’s bank account to the recipient’s one. You can use it to send money to a business or to another person, whether he or she is living on the other side of your street, or across the globe. It’s an alternative option for transferring money domestically or overseas to sending a money order or a check.

The term dates back to the late 1800s, when the necessary banking information was transmitted through telegraph wires. Though the transfer now happens electronically, the name has stuck.

Types of wire transfer

Wire transfers are of two types, domestic and international.

  • Domestic wire transfers take place within the same country.

  • International wire transfer is used to wire money between two different countries.

How does a bank wire transfer work?

First, you’ll need to go to your bank to conduct the wire transfer. You may be able to do this online or over the phone, but you’ll likely have to go in person. You’ll need to provide them with the following information:

  • The recipient’s name

  • The recipient’s BIC code (Bank Identifier Code) or SWIFT code

  • The recipient’s IBAN code (International Bank Account Number)

  • The recipient’s routing number (for domestic wire transfer)

  • The amount of money to be wired to the recipient

Next, you’ll have to deposit the money you want to wire, along with a separate transaction fee to be determined by the sending bank.

The sending bank then requests the receiving bank, via Fedwire or the SWIFT system, to credit the recipient’s account with the wired funds. One or more intermediary banks may also be involved in the process to facilitate the transfer (which likely means additional intermediary fees).

There’s no actual transfer of money. Once all banks have received the necessary information, the money is deducted from your bank account and added to the recipient’s bank account. And voilà—you’ve got your wire transfer process sorted!

How long does a wire transfer take?

Now that you know how to send a wire transfer, and have gathered all required information, setting up and initiating one is only a matter of minutes.

Depending on how soon you submit your request, banks within the US may process your wire transfer on the same day. International wire transfers take longer, but not more than 4-5 business days (at least, not usually).

There’s a specific reason why the processing time is different in both of these cases. In the case of domestic wire transfers, Fedwire or another real-time wire processing system clears the payments within a day. But since international wire transfers involve a domestic clearing house as well as a foreign processing system, these take an extra day or two.

How much does a wire transfer cost?

Bank wires are usually on the more expensive side than other types of electronic fund transfers. You may have to pay anywhere between $15 and $50 USD per transaction.

The bank levies a wire transfer fee, depending on the norms they follow and the transfer amount. At some banks, making wire transfers in-person or over the phone may cost more than wire transfers made through the bank’s website.

Of course, the fee also depends on whether the wire is domestic or international, and incoming or outgoing. Outgoing international wires are at the higher end of this price range, while incoming domestic wires are usually free to the recipient.

For example, the fees for international wire transfers going out of the US generally range from $45 to $50. At the same time, outgoing domestic transfers (if you’re in the US, and you wire money to someone else’s bank account within the US) usually cost between $25 and $30.

Some banks may also charge fees if you’re receiving wired money, though other banks may not. This fee may be between $8 and $10 for incoming transfers, or within the higher range of $15 to $20 at some banks.

Is wiring money safe?

Speaking of bank wires, these are less prone to risks of fraud than checks are. If a check bounces, several weeks may pass before you come to know that the payment was bad.

In contrast, you can’t initiate a wire transfer unless you have sufficient funds in your bank account, so it’s quite safe.

Is it more convenient than money transfers? 

Uh, no. First of all, compared to money transfer, a wire transfer can cost you an arm and leg, as we’ve discussed above.

Secondly, with money transfer, you can complete the entire process from the comfort of your home, or from anywhere you are, as long as there’s an internet connection. But to send or receive a wire transfer, you have to contact your bank, or even go there in person during business hours.  So you need to gather more information than a typical money transfer requires,  take more time out of your day, and pay more in fees.

Yes, you can use a wire transfer to quickly transfer and receive money through a bank, even internationally, but that’s just about it. Overall, wire transfers are more expensive and less convenient than money transfers, which are usually hassle-free. That’s why we think you’ll have more peace of mind sending money with Xe.

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

 

 

 

How Can Xe Help Your Business?

08-10-2020 | treasuryXL | XE |

From simplifying international payments to monitoring the currency markets, Xe is ready to help your business make the best foreign exchange solutions.

At Xe, we don’t just facilitate individual money transfers between individual banks accounts. While we do help our customers make money transfers to pay bills, prepare for international travel, or send money to loved ones back home, we also provide a number of money transfer products and services to our corporate customers.

Each year, over 13,000 businesses in over 100 sectors turn to Xe for help managing their international money transfer and foreign exchange processes. What can Xe help with? We’d be happy to tell you.

Save on currency conversion costs

We’ve said this before, but it always bears repeating. When you’re consistently making international payments or exchanging to foreign currencies, if you aren’t prudent in your transfer method, you can easily find yourself on the hook for a lot of additional costs. Bank fees, wire fees, unfavorable exchange rates, and hidden transaction fees are just a few of the extra costs you can potentially incur when making international payments.

Don’t have time to watch the markets? Don’t know how to analyze market volatility, or figure out the best time to transfer money? No problem. When you work with Xe, we’ll watch the markets for you. We’ll help you to get the best exchange rates possible for your transfers, and let you know when you should be making your payments to minimize the added costs. You can also integrate our Currency Data API into your existing systems to easily access exchange rates for your chosen currencies.

Simplify and effectively manage your payments—all of them

When you’re making frequent—and numerous—global payments, it’s important that they clear on time, are free of any errors, and meet all necessary regulatory compliance standards. Fortunately, this isn’t something that has to be done manually and payment by payment. Our systems can help you to simplify and streamline your international payments, without sacrificing quality in the process.

Our Mass Payments solution will enable your business to process, execute and deliver multiple payments on a global scale from a single gateway or integrated into your own systems, easily and securely. This solution will vastly reduce the amount of time and manual work in your international payments, which will then allow you to devote more time and resources to other areas of your business.

Get advice from someone who knows the markets

If you don’t have a background in foreign exchange, trying to make sense of the financial markets can seem an impossible task. And when you’re a business owner, you likely don’t have the time to sit down and familiarize yourself with every minute detail of the foreign currency markets.

We’ve been in the currency business for over 25 years. We know the markets, and we can help you to understand them, recognize the issues they may present to your businesses, and determine the best solutions to navigate the markets and make the best decisions for your business.

 

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