How to send cash overseas cheaply.
Forex, is short for Foreign Exchange. It is essentially the global marketplace where currencies are traded. Think of it as a massive, decentralised network where one country’s currency is exchanged for another.
Imagine you’re going on holiday from the UK to the US. You need US Dollars, but you have British Pounds. You go to a currency exchange shop (or your bank) and swap your Pounds for Dollars. That’s an, everyday example of a foreign exchange transaction.
Forex is the same concept, but on a global scale. It’s the largest financial market in the world, with trillions of dollars changing hands every single day.
When your business needs to send money across borders, it's more than just a simple bank transfer. It's about ensuring your suppliers get paid on time, your international payroll runs smoothly, or that you can quickly move capital between your global entities.
Imagine your company in the UK needs to pay a manufacturer in China for a shipment of goods.
You log into your business banking portal or go to your bank (let’s say HSBC UK). You provide all the details: the Chinese manufacturer’s full business name, their bank name, account number, and crucially, their SWIFT/BIC code. This code is like the business address for their specific bank branch in the global financial system.
Your bank doesn’t actually beam your money across the ocean. Instead, it sends a highly secure, standardized message (via the SWIFT network) to the manufacturer’s bank in China. This message is essentially an instruction: “Please credit X amount in Chinese Yuan (CNY) to ABC Manufacturing’s account, and debit our account accordingly.”
This is often where things get a bit complex and can cause delays and extra costs. If your UK bank doesn’t have a direct relationship (a “correspondent account”) with the Chinese bank, the SWIFT message, and the underlying money, might have to go through one or more intermediary banks. Each of these “middleman” banks helps move the funds along the chain, but they might also take a small fee for their service. This is why you sometimes see the final amount received is less than what you sent, or why the transfer takes a few days.
At some point in this journey, your British Pounds will be converted into Chinese Yuan. Your bank will use its own exchange rate, which typically includes a mark-up over the actual “interbank” rate (the rate banks use to trade with each other). This mark-up is how they make a profit on the foreign exchange.
Finally, the Chinese bank receives the message and the converted funds, and credits the manufacturer’s account.
This is where many businesses, especially those with frequent international payments, are finding significant advantages. Think of companies like Wise Business, Airwallex, or other dedicated B2B payment platforms.
Instead of sending money directly through the complex SWIFT network, you transfer your funds (e.g., £10,000) to the specialist provider’s local bank account in your country (e.g., their UK account).
This is the game-changer. These providers have a vast network of their own bank accounts in various countries. So, while your £10,000 sits in their UK account, they simultaneously use their own local funds in China to pay your manufacturer directly in CNY.
Because they’re effectively just moving money between their own global accounts, they bypass most of the SWIFT network’s intermediary banks. This leads to:
Faster Transfers: Often same-day or within 24 hours.
Lower Fees: Significantly reduced (or no) intermediary fees.
Better Exchange Rates: They typically offer rates much closer to the “real” interbank rate, with a small, transparent fee on top. This means more of your money reaches the recipient.
Many of these platforms offer tools specifically for businesses, like:
Batch Payments: Pay multiple international invoices in one go.
Hedging Tools: Lock in exchange rates for future payments (e.g., forward contracts) to protect against currency fluctuations.
Multi-currency Accounts: Hold balances in different currencies to receive payments from international clients or manage funds.
API Integrations: Connect their payment platform directly with your accounting or ERP software for automation.
We strive to bridge the gap between complex financial needs and cutting-edge fintech, ensuring our clients can operate efficiently in an ever-evolving global market.
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