Foreign currency

Transacting across borders

Louise Carter, Head of Money Transmission at Santander, outlines the key considerations for businesses conducting overseas transactions

Louise Carter, Head of Money Transmission at Santander, outlines the key considerations for businesses conducting overseas transactions

Q: What are the issues and complexities around foreign currency transactions?

A: It is important that businesses are clear on both their own market and payment requirements and those of any overseas clients, to ensure the services utilised are appropriate, providing adequate protection for the management of payments and funds.

Dependant on how your business prices and transacts, you should consider the following:

  • If exporting, do you price in Sterling or foreign currency? If the latter, how do you protect yourself from Foreign Exchange (FX) movements?
  • If importing and exporting, can FX payments and receipts be matched by using currency accounts?
  • Are the various risks or costs being reviewed and managed by appropriate Trade Management services (open account, collections, letters of credit, for example)?

Q: What are the risks of conducting foreign currency transactions?

A: It is crucial to gain a good understanding of the regulations applied to currency transactions and payments. If your business is making FX transactions, for instance, you should consider the following issues:

  • FX exposure – is hedging appropriate?
  • Receiving payments – are currency and account solutions in place?
  • Does each trading party know who is responsible for insurance, freight, and so on?

Q: Are there particular issues arising from transacting with certain countries?

A: In any FX trading environment, businesses should remember that their clients could be subject to different cultural and regulatory approaches to trade. Outside the EU, there are unique trading requirements to take into account – trade with China is conducted in US dollars not local currency, for instance.

Q: What solutions does Santander offer companies entering foreign markets?

A: Santander offers a wide range of solutions, across all elements of the foreign trade, including:

  • Currency accounts available in 19 currencies, moving to circa 30 by the end of 2012, allowing customers to transact and match payments and receipts easily
  • Spot FX transactions – sale or purchase of currency – available in 19 currencies
  • Forward contracts available (via our global trading desk) for high volume clients
  • Correspondent banking network and geographic reach throughout southern Europe and South America – we understand the market well and have an international desk to help facilitate the opening of accounts overseas
  • A wide range of solutions to support importing and exporting transactions offered by Santander Trade Services

Q: How does Santander help companies transacting overseas?

A: Our international payments service offers a range of competitively priced products allowing all businesses to send, receive and manage foreign payments quickly and efficiently. Our products are designed to meet the needs of importers and exporters from a wide range of business sectors, including wholesale, retail and manufacturing, as well as not-for-profit organisations and charities.

Banking with Santander provides access to a team of international payment and trade experts.

Want to find out more?

Santander is always happy to hear from businesses, to give advice and talk through options. If you want to find out more about managing foreign currency transactions, or any other service offered by Santander, contact your Relationship Director.

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