Company Details
Company: World First
Based: London
Website:http://www.worldfirst.com
Employees: 60
Q Who are you?
Jonathan Quin and Nick Robinson, the founders of currency exchange company World First.
Q What do you do?
We provide better exchange rates and service to companies and private clients making or receiving international payments. We also offer forward contracts and hedging strategies to help clients avoid currency fluctuations.
Q What does that mean in practice?
Companies use us to make international payments instead of their bank. They can book an exchange rate (by phone or online) to convert their currency that day or on any date up to a year ahead. They can send their currency to us or we can debit their account. We convert their funds into the requested currency at the pre-agreed rate and make their outgoing payment. For US dollars, euros, Canadian dollars and pounds, we can make very fast payments that usually reach the recipient bank on the same day.
This means companies usually save between 0.25% to 2% of the amount they’re transferring. For example, if you were paying for a container that costs the equivalent of £100,000, we would expect to save you £250 to £2,000.
Q What size company suits you?
We can work with any size, but our clients are primarily mid-market firms. The minimum transfer amount is £1,000 and the maximum is £20m.
Q Why should I care?
Fluctuating exchange rates can significantly affect profitability. For example, between July 23 and September 11 2008, the sterling-dollar exchange rate moved down from 2.00 to 1.74. If you had agreed in early July to purchase goods and were paying in September, the cost would have risen in sterling terms by 13%. This can be avoided by booking a forward contract or agreeing a hedging strategy. Using us can also be an easy way to save money as we offer better exchange rates. You can effectively reduce the cost of your product or raw materials by, say, 1%, at no cost and with no extra effort.
Q What can you do for me that I cannot do myself?
Because we transact large volumes in the market (over $1bn last year), we can access interbank exchange rates. We usually take a smaller margin from these than banks, offering a rate you couldn’t access yourself. We have significant trading lines that enable us to offer forward contracts. We are also the only currency broker in the UK authorised and regulated by the Financial Services Authority to offer options-based hedging strategies.
Q What mistakes will you stop me from making?
Losing money through currency fluctuations and wasting money on poor exchange rates.
Q Give me an example
In September 2007, a wine importer agreed to buy 500 cases of wine from a producer for €88,200, for delivery in March 2008. The exchange rate in September was 1.47 and he was able to book a forward contract with World First at 1.45. This meant the cost of his wine in sterling terms was £60,828. He planned to sell the bottles in the UK for £13.99 each, generating a gross profit of £23,112. By March 2008, the rate had moved down to 1.26, but he was still able to buy at 1.45, using his forward contract. Had he not ‘hedged’ his exposure, by booking the forward contract, the actual cost would have risen to £70,000. This would have cut his profits to £13,940, a 40% drop in his margin.
Q Why should I trust you?
We have been profitable every quarter since we started trading, have no debts or liabilities and have reserves and collateral posted with our banks of over £2m. All client funds are kept in segregated accounts separate from our business accounts. We are a highly ethical company and always happy to agree fixed margins with clients to ensure total price transparency.
Q What will it cost me?
There is no cost to become a client and we don’t charge commission. You simply pay the amount we pre-agree when you book a transfer (the amount of currency you want divided by the exchange rate), and we take a small margin.