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Payment Reasons > Spot Contract

A ‘Spot’ allows you to buy currency today - but why buy a 'Spot' from Smart rather than the bank?

Whether transferring large or small funds, either internationally or on a regular basis, it’s the same procedure - whether you use Smart Currency or a bank. Let's start off with using a bank...the person making the transfer instructs their bank to send the amount due to the beneficiary’s bank overseas. When calculating the amount due in the overseas local currency, the bank will instruct the buyer of the cost and they will be debited accordingly. Within 5 days of instructing the bank, the funds in the designated currency will arrive and clear at the overseas destination. 

The actual process of moving money isn’t rocket science – however, the commission, currency exchange rate and fee structure imposed on clients by the banks can be extremely confusing.

And through this confusion, the banks are able to relieve clients of substantial sums of money without them even realising it. The Sunday Times (5 Feb 2007) reported that: 

“Britons buying property abroad could have lost out on up to £1.8 billion because of high-street banks offering such a poor deal on foreign exchange, according to new research.”

Before I explain how the banks make their billions on international currency transfers, let me explain what the ‘interbank’ rate is. The interbank rate is the price banks trade between each other when they’re moving millions. When rates are announced on the news, on Internet ticker tapes or in the newspapers, they are not the rates that you or I can actually buy at, but they are the rates the banks use between themselves.

Even though you can never buy currency at the rate quoted on the news, the interbank rate gives you an indication of where the rate is and what direction it’s moving in. It also gives you a rough idea as to how much currency will cost you.

When you do decide to buy currency or make an international payment the institution that you do it through will put a ‘mark-up’ over and above the interbank rate. So – if the interbank rate for a pound is equal to €1.15, you should expect to buy euros at a discounted price of €1.12, the difference representing the mark-up.   

So - as stated at the beginning, the process for buying currency or making an international payment between a bank and Smart is the same however there's a massive difference in the 'mark-up'. For bank to bank transfers (which means electronic transfer of funds and not physical cash), Smart adds a mark-up of 1% (on average) over and above the interbank exchange rate whereas banks add a mark up of 3% to 5%. Compared with the mark-up supplied by the banks, that’s an instant saving of up to 4% by using Smart. On a £100,000 transfer that’s a reduction of £4,000 by using a currency specialist rather than a bank! And on a regular payment of £1,000 a month that’s a saving of £40 a month or £480 a year!

In order to ensure that you know how to save money on the international payment process, call Smart Currency on our free phone number 0808 163 0102 (free phone) or Apply Online.

Client Feedback

"During a very difficult time when the pound was very weak we still managed to save several thousand pounds thanks to your prompt and efficient personal service. Thanks. Sue Bristol " more testimonials

"Just used Smart for the first time and what a tremendous experience, from the initial phone call enquiry through to the transaction. I experienced concise information plus pro-active and personal service. We will be using you again and recommending you to others. We can't thank you enough - we had difficulties with our bank when we asked for the cash to transfer, but James Thorpe helped us out again and again to get the transaction through. Also, house sale goes through next week - had we not used your services and transferred the money a month ago our German house would now be costing us an additional 15,000 euros!! Sue McFarland " more testimonials

How will Smart help you to reduce the risk of your property price increasing by £1,000's when doing a money exchange? By:

  • Providing better-than-bank exchange rates
  • Reducing the risk of your international payments from INCREASING
  • Offering a service with no fees*, no commission, no hidden charges (*Fees on amounts under £3,000)
  • Giving you direct access to your dedicated Smart Trader. Unlike most UK international payment specialists, Smart Traders are not paid on commission, thus your trader will be working for you - not their pay-packet
  • Making the whole process fast and effortless

Apply online now and get access to your Smart Trader to discuss just how much Smart can save you!

Are you interested in saving money the Smart way?

Apply Online to open your free, no-obligation trading facility
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  • Read our Free Report - Find out how much you can save by being Smart!

Suggested ways to transfer money:

Set up an 'Order to Buy' If the rate of exchange hits a 'budgeted' rate that you have in mind, your Smart Trader will buy it for you.
Learn more

Reserve today's currency rate for a payment later
This option is fantastic for property buyers that have staged payments and want to ensure against an unexpected change in the price of your currency
Learn more
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