Regular payments are generally a simple and cost effective way of transferring money overseas on a regular basis. Regular payments consist of a number of payments transferred to the same beneficiary on a recurring, typically monthly, basis. Regular payments can remove exchange rate risk, reduce costs and save clients time and the inconvenience of remembering to book monthly transfers.
An example of a typical regular payment; A client living in the UK has to make monthly mortgage repayments on a property in France. The client could set a regular payment to send GBP 1,000 on the 1st of every month into Euro’s. The provider would then direct debit the client on a monthly basis and pay the funds into a nominated French bank account accordingly.
Examples of what Regular Payments can be used for:
- Mortgage payments
- Pension payments
- Salary payments
- Regular savings
- Maintenance on property
- Rental income
The majority of foreign exchange providers offer a forward contract for regular payments which will be where the client can either specify the buy currency or the sell currency.
How it works:
- Arrange an amount you wish to buy or sell and nominate a beneficiary to receive the funds.
- Discuss how often you would like funds to be remitted and agree the regular payment contract.
- Many FX providers offer to direct debit your funds. Alternatively if this is not an option then payment can be made via standing order.
- Once funds have cleared the provider will release payment to the beneficiary.
- Usual terms (vary between FX providers):Usually a minimum of £500
- No fees
- Deposits may be required if the regular payment is the equivalent of booking a forward contract over a specific period of time – the Deposit would generally be allocated to the final payment of the contract