Jack Murphy works at RationalFX, one of Europe’s leading foreign exchange providers, helping individuals and businesses worldwide to save time and money on their international payments.

Currency market risk is the threat of political and economic variables triggering exchange rate fluctuations that drive up the cost of your international payments. Whether you’re an individual or business looking to send money to or from the UK, Spain, Malta or Gibraltar, the shifting value of the euro against the pound could impact the cost of your currency transfer. This highlights the importance of seeking expert currency market guidance to help mitigate the risk of volatile markets affecting your transaction cost, allowing your money to go further.

This leaves you with a big question to answer: Should I use my bank or a foreign exchange provider?

Looking beyond your bank

Whether you’re funding an emigration, paying legal fees or have received inheritance money abroad, you should shop around for the most specialised and cost-effective option on the market. If you were taking out a mortgage or buying insurance, for example, you wouldn’t hesitate to adopt a prudent approach to your finances – and making international payments should be no different.

Banks offer customers a wide range of services, making them appear to be the obvious choice when making an international transfer. However, when it comes to exchanging currencies and executing international payments, their exchange rates may not be as favourable and the currency market support you receive may be limited.

What are the benefits of using a foreign exchange provider?

Here are just some of the key reasons why people choose to use FX companies over high street banks to make their international payments:

Competitive exchange rates

A foreign exchange provider is often able to provide more competitive exchange rates than the banks, who make the bulk of their profit by charging additional fees. This is because foreign exchange companies trade millions of pounds a day so they can receive ‘wholesale rates’, and they can pass this cost reduction onto clients. Even a seemingly small variation in the exchange rate can make a big difference to the cost of large transactions, which could cost you up to hundreds to thousands of euros or pounds.

Transparent fees

Some high street banks may charge additional fees when making an international payment. FX companies, on the other hand, only charge a low transaction fee which will always be indicated from the start.

Speedy transfers

In this modern age of rapid technological innovation, consumers demand convenience in everything they do – and international payments are no exception. If you’re sending money overseas, you’ll want it to happen as quickly as possible. Foreign exchange providers can offer same working day transfer services for major currencies.

Personal service

One of the key advantages of using a foreign exchange provider over a high street bank is the personal service you’ll receive. Each client is designated an account manager; a dedicated currency specialist who understands that timing is crucial when making international payments and will work closely with you to provide invaluable market guidance and insight. You’ll benefit from the reassurance of knowing you have a trusted point of contact who cares about guiding you through the often-unpredictable currency market landscape.

Planning ahead

Whatever your requirement may be, there are a range of FX tools and services that are designed to help you manage the cost of your international payments by planning ahead. Your designated currency specialist will go through these with you and help you pinpoint the product that will meet your needs.

These include:

  • Forward Contract: rather than trying to predict market movements, this allows you to fix a rate at the current level for a transfer that happens in the future. You can then relax, knowing that the price of your payment is protected from exchange rate fluctuations.
  • Market Order: you can choose a trigger rate you want to make your international payment at. Once the market hits your desired level, your payment will be executed at that rate, eliminating the need to monitor the currency markets.
  • Regular Payments Plan: if you’re making the same international payments each week, month or quarter, a Regular Payment Plan (RPP) offers confidence, efficiency and cost- effectiveness. Using a standing order, an RPP automates the payment process to occur in line with your required schedule. Security of payments One of the reasons why banks are a go-to choice for international bank to bank transfers is the element of trust. But how do you know whether or not you can trust a foreign exchange company?

Here are three simple questions you need to ask to guarantee an FX provider is credible and trustworthy:

1) Are they authorised by the FCA, and registered with HMRC?

These are the two main regulatory bodies that all money service providers should be registered under.

2) What is their business track record?

Check Trustpilot reviews, read case studies and don’t be afraid to ask to talk to one of their clients for a quick chat.

3) How are your funds held?

Check if your funds will be held in a secure and segregated account. Your funds should be ring- fenced and protected against any serious operational difficulties faced by the company. That way, even if the company faces financial difficulties, your funds will be safe.