Western Union Business Solutions (‘WUBS’), a leader in global payment services, has announced the launch of a new product to help tens of thousands of SMEs in Hong Kong who are making international payments.
The new FX Options is added to Western Union Business Solutions’ current range of FX products – namely its spot FX and forward FX contracts – and payment products. The new FX Options aim is give companies that deal with multiple currencies in their day-to-day business more choice and support to enable them to hedge currency risks and protect themselves against volatile exchange rates.
Volatile exchange rates can have a significant impact on profit margins and cash flow. Research with businesses shows that 56.3% of SMEs in Hong Kong only find out the true cost of an invoice after the payment is made1. When payment costs run higher than expected, companies are negatively impacted as they have to cover the unexpected cost by using working capital or forfeit some of their profit margin.
“FX Options can help SMEs manage currency risk by guarding against negative market shifts, as well as giving business owners the opportunity to take advantage of favourable movements in the exchange rate. FX Options enable SMEs to predict their cash flow more accurately and develop more reliable business forecasting. This helps SMEs to focus on their business, rather than worrying about cash flow challenges that impact their ability to purchase products or disrupt their supply chains”, says Simon Glendenning, Regional Director APAC, Middle East & India at Western Union Business Solutions.
Western Union Business Solutions will introduce FX Options that can be tailor-made to align to the business goals of each SME. Each FX Option will serve a slightly different purpose, allowing businesses the flexibility to choose the best option for them.
“Although globalisation has made it easier for businesses to tap into overseas opportunity, it has also added new complexity to the management of cash flow. Companies are seeing that even small movements in exchange rates can have an impact on their bottom line. FX Options are a popular way to mitigate the impact of fluctuating currencies on a business’ profits; they help prepare for future foreign currency expenses and stabilise cash flow, in turn allowing companies to budget for the future with confidence” concludes Glendenning.