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Forward Contracts

Forward contracts allow locking the current exchange rate for a future payment.
Payment providers typically offer Forward Contracts, especially within the offshore property investment industry. When a client agrees to a Forward Contract, it marks a specific asset at the current exchange rate for future payment. Companies often use Forward Contracts for hedging and speculation.

Clients with offshore investments and recurring contractual payments for assets can significantly benefit from Forward Contracts, especially in areas with especially volatile currency markets. It allows the client to secure an exchange rate on a currency pair at a preferable level for a fixed term.

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Efficiency
The client can set up Forward Contracts once-off for multiple payments. It saves time and prevents the need for monitoring markets for preferred rates.
Peace of mind
rate assurance gives peace of mind as forex payments won’t fluctuate month to month. A Forward Contract secures a fixed rate, regardless of market movement.
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Companies offering Forward Contracts

XE

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This provider is under the Euronet Worldwide Inc umbrella, which is a NASDAQ listed company. It ensures the safety of the client’s funds and offers Forward Contracts for up to 36 months. XE integrates seamlessly with popular accounting software, so future payments will pull through to the bookkeeping as it is released. Accounting and record-keeping are automated and accurate. With XE, protocols are safe and secure, forward contracts are fully automated, and they’re accessible via a convenient mobile app. However, forward contracts with XE may be a little expensive for small businesses (range between $799 – $7,999 per year).

Currencies Direct

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Currencies Direct Forward Contracts is an innovative tool that gives clients the flexibility to manage future payments for services and products. The key feature that sets it apart is that a client can extend an existing Forward or draw down on the funds directly from the app. While specific industries get customized solutions and clients have full control to manage the Forwards, they are only available as a free service to traders with fixed international vendor payments.

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ofx

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The OFX Forward Contract is a feature that allows clients to buy currencies and store them for up to 12 months for future payments. Best viewed as a sort of “multi-currency account”, OFX offers flexibility in that its Forward Contracts are not item- or vendor-specific, and clients can buy at favorable rates for multiple purposes. In the context of forward contracts with OFX, the currency is already paid for, and the contract is not invoice-specific; the client can hedge a part-payment of any invoice. However, it has to be paid for in full at the time of agreeing to the contract.

Worldfirst

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The WorldFirst Forward Contract allows clients to buy or sell specific currency pairs at a fixed rate for up to 24 months. It gives clients the scope to use the currency for identifiable services, goods, or capital investments. WorldFirst operates 24/7 and offers credit facilities to help cover the deposit for initial set up. It’s important to note that contracts may not be canceled or changed, and that the client can miss opportunities if the market moves in their favor during the contractual period.

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Summary

A Forward Contract is an essential financial tool for companies that trade internationally. It offers a long term solution that safeguards cash flow forecasts against volatile currency markets. The best payment providers offer full service and hedging strategies to assist businesses in saving and optimizing on forex conversions. Go To Full Comparison