A customer first approach to international business payments
On 11 March 2020, the World Health Organisation (WHO) declared the outbreak of COVID-19 a pandemic. A little more than a year later, the path to economic recovery remains uncertain, even as restrictions begin to ease across the UK. This is particularly challenging for small businesses across the country who now have to navigate the continued impact of the pandemic as well as the changes brought about by Brexit.
In spite of this, many SMEs have managed to pivot their businesses to address ‘the new normal’ that emerged as a result of the pandemic, and international business payments provider WorldFirst have been there as a trusted partner to help them through this period.
How have WorldFirst provided immediate support to SMEs during this period?
At WorldFirst we place the customer at the heart of our decisions. By taking a customer-centric approach we continually listen to customer needs, do our best to understand them, and provide solutions to match. As part of our approach we are committed to championing small to medium sized businesses, and as the pandemic continues, and the true outcome of Brexit steadily unravels itself, our dedicated team of relationship managers have been on hand to help. Here are some of the ways WorldFirst have supported businesses across varying sectors during one of the most challenging trading periods of recent times:
- Speeding up the supply chain by accelerating payment flows between buyers and sellers; unlike the major high street banks which still take 2-5 days to deliver funds to your recipient, WorldFirst can deliver the funds the same day across 12 of their most popular currencies
- Providing transparent pricing to help customers help understand the true cost of their international transfers allowing them to better plan for the future
- Creating local currency accounts, allowing customers to collect refunds from cancellations in the same currency. This mimimised the cost of exchange so customers could hold refunded currency to use again in the future
- Offering support on how best to pay quickly and securely to new regions, ensuring strong supplier relationships from the outset
- Evaluating risk management strategies to see where forward contracts and other currency hedging tools could be implemented to mitigate potential business losses
- Supporting customers with their business needs through dedicated and personalised customer services
Through speaking with our customers, we experienced a broad spectrum of challenges facing SMEs. From the travel industry, all the way through to tech, retail ecommerce, recruitment, and more, here are some of our customer stories.
Mitigating currency risk in the travel sector
Pandemic turbulence hit the travel industry hard in 2020. The economic mire caused by Covid-19 manifested on company balance sheets and the global travel and tourism sector faced enormous disruptions. With currency market volatility catching out hundreds of companies during the early weeks of Covid-19, the importance of a robust risk strategy became more important than ever, and we at WorldFirst were ready with the infrastructure and service to help.
Helping wholesalers face a new paradigm shift
The need for a risk management strategy didn’t just prove to be vital for the travel industry. Independent tech wholesaler InfaPower also saw the value of having a risk management strategy in place as new flaws were exposed in procurement models and global supply chains were weakened. With WorldFirst you can buy or sell a fixed amount of currency with a forward contract, something of which was integral to Peter Keen (Company Director at InfaPower) as it allowed him to protect his profit margins and internal budgets, all whilst remaining competitive and increasing cashflow predictability.
What would you do if your cost increased by over 10%?
No matter the industry, mitigating currency risk can help protect SMEs against currency fluctuations without having to buy currency upfront on the spot market.
In 2020 overlooking the development of a company-wide foreign exchange policy would have proved costly. On March 20, sterling fell to its lowest level against the US dollar for 35 years, with the GBP/USD exchange rate moving from 1.3157 to 1.1494 in the space of a few days (a shift of around 12.6%). Companies making US-dollar payments from sterling during that period, without any forward contracts in place, would have seen a dramatic difference in the amounts received from the same payment had it been settled on March 10, compared to March 20.
Depending on your business requirements, WorldFirst can help you approach your currency risk in a number of different ways, and offer the following currency hedging tools to help you achieve your business requirements:
Forward contracts: lock in an exchange rate for up to 24 months and reduce downside risk exposure with fixed, flexible and window forwards. Orders for spot: allow your company to agree to transact an amount of currency for immediate delivery (within 2 working days) if you can get a particular rate. Firm orders: place a transaction at a rate of your choice – WorldFirst will watch the markets for you and execute your transfer the moment your target rate has been hit – 24 hours a day, 7 days a week.