Seeking to lower the cost of cross-border payments in some currencies, INTL FCStone Ltd.'s global payments division is launching a real-time financial information exchange that will more accurately provide exchange rates.
Many bank customers don't benefit from currency movements, and potentially lower rates, because the banks work off a static exchange rate for what are called "exotic" currencies, said Carsten Hils, global head of INTL FCStone's London-based global payments division.
Exotic currencies, such as those from Nigeria, Egypt, Bolivia, Guatemala and Vietnam, are generally "thinly traded currencies that do not trade off of a screen price and may have significant price variations across the local market," Hils said.
Other exotic currencies that are not the simple byproduct of a wire transfer require some intervention to ensure funds cleared correctly to the beneficiary's account. These transactions might come from countries like Brazil, Taiwan or South Korea.
The financial information exchange will operate within the FXecute global payments platform, operating as an electronic communication protocol for cross-border payments and a better real-time reading on those rates. FXecute allows bank clients to complete payments in more than 175 countries and 140 currencies through the global payments division's network and 300 correspondent banks.
“We have been the industry leader in providing cross-border payments solutions in exotic currencies for two decades, and the integration of this functionality with our proprietary FXecute platform substantially enhances the services that we offer to our bank customers," Hils said.
The integration provides pricing transparency and streamlines the payment process for the company's bank clients, Hils added.
The financial information exchange allows customers to view market rates for various currencies, execute and manage orders in real time, and view the status of their payments through the FXecute portal.
INTL FCStone says it is one of the first organizations to offer real-time rates for exotic currencies.