As Amex have announced the upcoming decommissioning of its Foreign Exchange International Payments (FXIP) service to non-US businesses, we look at what businesses should be considering when it comes to their new provider in this evolving FinTech-enabled environment.
A quick summary of the situation
Amex has taken the decision to stop providing foreign exchange services to business customers outside of the US due to “significant foreign exchange volatility off the back of aggressive monetary policy tightening from the world’s central banks.”
While it was hinted at in their 2022 annual report where earnings and capital were at risk of rapidly declining due to increasing interest rates, Amex have found that this, along with greater government regulation and capital controls, has culminated in this international step change for their business.
Some key factors in Amex’s decision to stop its FXIP operations outside of the US:
- Australia’s interchange fees and various terms around merchant card acceptance.
- The US Federal Reserve’s cumulative 500 bps raise on rates since 2022.
- In May 2023, the Federal Open Market Committee (FOMC) lifted funds to 5-5.25%.
Despite 22% of Amex’s total revenues coming from business outside of the US last year, Amex cited they were ‘exposed to foreign exchange risk from international operations, and accordingly, the revenue we generate outside of the United States is subject to unpredictable fluctuations.”
What to look for in your next FX provider
For those looking for a new FX provider as Amex closes up its international shop, it’s a good time to re-evaluate what is and isn’t working for you and to look at the providers in the market that have both service and technology front of mind for their customers.
Whether it's only spot and forward products you’re looking for or you’re wanting to browse alternatives such as FX Options, there are providers, like Navinci Global Markets, who can find the best fit for you in this climate and age of tech.
Competitive rates
This sounds like a no brainer as of course, competitive rates are always sought and are advertised by pretty much every FX provider out there. However, it’s important to remember what a competitive rate is actually made up of:
- Live rates for comparison
- Fully transparent fees
- Why a rate is more competitive
As market makers, Navinci Global Markets' treasury establishes their own FX markets engaging customers with sharper pricing as opposed to taking prices from banks and on-selling, as is the typical broker model.
Service
When it comes to the service of an FX platform, many businesses today are accustomed to having very little customisation or discussion on what best suits their needs before or after they get started.
Navinci offers a consultant-led, dedicated dealer service; we want to understand your business and your challenges and to build a strategy to fit with your timeline. Our goal is to enable you to focus on your core business without having to worry about FX markets and administration so it works seamlessly alongside your day-to-day.
A powerful and simple platform
Unless your full time job is dealing, there is no need for a complicated platform and UI but this doesn’t mean it shouldn’t work just as efficiently for your business needs.
Navinci's specialist hedging and payments platform, NaviHedge, is a simple self-serve platform that gives you 24/7 access from wherever you are. You can also get going immediately because of its plug-and-pay setup, which is particularly handy given the short timeframe of Amex’s soon-to-be decommissioned service.
NaviHedge’s differentiated power however lies in its real-time reporting and monitoring capabilities. This unique level of insight for businesses means you always know your risk exposure thereby allowing you to make a more informed decision for your business in real-time.
Option product suite
Having access to the full range of FX products alongside personalised and experienced guidance with strategy puts your business in a better position to have currency work with your business, not against it.
Previously this would only have been available to large businesses with an in-house specialist team, however Navigate has changed this dedicating skilled dealers and strategists to your business. We offer a large option product suite that includes live in-platform tracking and a mark-to-market capability, so you can continuously track your market positions and have a full view of your financials.
What to do next
Whether you're a displaced Amex customer or a business simply looking to revive its FX strategy with a more dedicated service and powerful technology, Navinci Global Markets is here to help you find the best path forward.
Book a meeting with one of our expert option strategy professionals to find out if an option strategy is the right fit for your business and to see a demo of all our platform’s capabilities.
