Domestic and Foreign Money Transmission
This is the fundamental level of banking without which everything else grounds to a halt. However, many people think that they understand all there is to know. However, we concentrate on methodology, price, and, especially, ensuring that the most appropriate instrument is used.
Example 1
A client in the West Midlands was making a large number of US Dollar payments by transfer, paying £15 for each. These were commercial payments. The arrival of the payment plus or minus several days of the due date is really irrelevant. We have negotiated a favourable rate for our clients with JPMorgan Chase when they open a US Dollar account with the bank in New York.
Hence, we recommended that our client should open such an account and write cheques on this for payment of the US invoices. The cheques are free for the first year and will cost less than $1going forward. Clearly, this represents a significant saving by matching the payment instrument with the type of payment.
Example 2
A client in the Home Counties made a lot of euro payments by transfer. Again these were commercial payments made though the Real Time Gross Settlement (RTGS) route. This is the euro equivalent of CHAPS. He was paying £10 for these, while many of the payments were for not much more. We introduced this client to a European bank, which offered ACH (BACS- type) transfers throughout Europe for 35 pence. Again, this represents the use of the appropriate instrument and knowing where and how to get it.
Example 3
We conduct many price reviews for our clients. Unless a tender has been undertaken recently, prices can get seriously out of sync. Generally, we recommend that our clients go back to their banks and suggest that pries are updated to the levels indicated within our reports. The prices in our reports are those we know that particular bank has offered to other clients. The norm is to achieve a reduction of about 50% in Bank Charges.
