Never again pay too much for your foreign currency

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2 Never again pay too much for your foreign currency Entrepreneurs often pay too much for currency transactions and hedging currency risks. There is a better, faster and cheaper way. That is why we established the Nederlandsche Betaal & Wisselmaatschappij (NBWM). We help entrepreneurs with foreign exchange in various ways. We make sure they pay less and we offer the best possible service. Why you pay your bank too much Banks trade in currencies on the interbank foreign exchange market. They obtain favourable exchange rates but do not pass these on to their customers. Instead, they add a profit margin to the exchange rate. Obviously, this is a good thing for the banks and their earnings, but this is not good for you. Without realising, you pay considerably more due to exchange rates that are too high. That is not the only reason why banks are too expensive, however. Entrepreneurs have to pay their banks numerous other charges as well: You pay fees for opening and maintaining a business account You pay transaction fees You pay additional fees for international payments You pay additional fees for maintaining a foreign currency account You pay service fees 2

3 How to save a lot of money on currency transactions Why pay too much if it can be done cheaper and better? Every day we help our customers save money through favourable currency transactions and personal service. We charge lower fees or none at all, and we often offer significantly better rates than the bank. We only do what we are good at. We are specialists. We only deal with currency payments and hedging currency risks. Therefore, we have little overhead. We also develop our own IT systems and infrastructure. This allows us to efficiently carry out currency transactions. We pass on these benefits to our clients: better exchange rates, lower costs and good personal foreign exchange service. More benefits Would you like to make a transfer? We do not charge any fees for a transfer of 10,000 or over. For smaller amounts we charge 15 per currency transaction. 3

4 Where does NBWM save you money? Save on a payment in five steps The invoice You receive an invoice from your foreign supplier. The invoice is in a foreign currency. The international payment Your bank often only gives you an indicative exchange rate (also called the reference rate ) when you intend to make an international transfer. You will only be informed of the actual exchange rate the bank uses for the payment through your bank statement afterwards. This virtually always turns out to be unpleasant for you. We believe you should have immediate clarity. This is why we provide you with the exchange rate at which we can exchange the amount in advance. Only when you are satisfied with the exchange rate, we carry out the currency transaction for you. The currency transaction The bank adds a considerable profit margin to the exchange rate. That is good for the bank, but not for you. You will receive an unfavourable exchange rate, as a result of which you are unwittingly charged too many euros on the invoice. We can carry out currency transactions more efficiently, allowing us to give you better exchange rates than the bank in many cases. This will save you many euros. The execution The money is transferred to the bank account of your foreign supplier. Your bank statement It is not until you view your bank statement that you will know the actual exchange rate of the transaction. That rate is often less favourable than the reference rate. These are not the only costs, however. The bank charges fees for the transfer, for your business account and for your foreign exchange account. We do that differently. We inform you of the exchange rate we use to carry out the currency transaction in advance. Unlike the banks, both your business account and your foreign exchange account do not incur any fees. Moreover, we do not charge any transfer fees for a currency transaction of 10,000 or over. No surprises and no setbacks for you. 4

5 Save on receiving a payment in five steps The invoice You send an invoice to your customer abroad. The invoice is in a foreign currency. The international payment Your customer pays the amount due. The amount must be transferred to your foreign currency account. The currency transaction Banks apply unfavourable exchange rates for the execution of your payment by allowing for a high profit margin for themselves. That is good for the bank, but not for you. We apply significantly smaller profit margins. When you exchange foreign currencies with us, you will often receive a better rate. This means more euros for your invoice. The execution The money is transferred to your bank account. Your bank statement The bank statement specifies the costs you are required to pay for the payment received. In addition, the bank charges for the costs of maintaining a business account and a foreign currency account. We do that differently. Payments received are free. The same applies to your business account and foreign exchange account. Both are free of charge with us. 5

6 Help from our foreign currency experts Our foreign currency experts are ready to help you. Our experts have been active in the foreign exchange markets for many years. They are your direct and personal contact. Our foreign currency experts acquaint themselves well with your business, allowing them to be well informed of your situation and to proactively respond to your needs. They help you reduce your costs and currency risks. In addition, they keep an eye on the markets for you, so you carry out your currency transaction at exactly the right moment. If you want to, they can even carry out the transactions for you. NBWM foreign exchange experts in the dealing room at Beursplein 5, Amsterdam 6

7 Trading online With us you have direct access to the global foreign exchange markets. You can conveniently trade online or hedge your positions 24 hours a day, six days a week. And you have access to the lowest rates of various currencies. Moreover, you can monitor all your current transactions in real time and you have a detailed overview of your transaction history. Everything takes place within a wellsecured online environment. Our treasury management system is fast and reliable. Do you have any questions? Please contact one of our foreign exchange experts. They feel personally involved and have extensive knowledge of the foreign exchange market. They ensure fast, efficient and personal support. Direct access to the foreign exchange markets through the NBWM Treasury Management System 7

8 Spot transactions. Make and receive payments fast Want to quickly make a payment in a foreign currency? In that case, a spot transaction is the ideal option. Just exchange one currency into another at the current exchange rate. It is a fast and easy way to make or receive payments. Our foreign exchange experts first discuss the exchange rate with you. Once you are happy with the exchange rate, we will carry out the currency transaction for you. This way, you immediately know where you stand and there will not be any unpleasant surprises afterwards. Currency overview NBWM offers many currencies. We can also help you with transactions in currencies of emerging markets. This gives you the option to pay your suppliers in their local currency. This may result in purchase savings since your supplier does not need to take any foreign exchange fluctuations into account. EUR Euro HUF Hungarian forint USD United States dollar ILS Israeli shekel GBP Britsh pound KES Kenyan shilling CHF Swiss franc KWD Kuwait dinar JPY Japanese yen MXN Mexican peso CAD Canadian dollar NOK Norwegian krone AUD Australian dollar RUB Russian ruble CNY Chinese yuan TRY Turkish lira DKK Danish krone ZAR South African rand HKD Hong Kong dollar SGD Singapore dollar PLN Polish zloty THB Thai Baht SEK Swedish krona MAD Moroccan dirham NZD New Zealand dollar IDR Indonesian rupiah RON Romanian new leu CZK Czech koruna Some examples of the available currencies 8

9 Hedge currency risks Exchange rates can be volatile. This can result in a profit or loss. If you wish to protect your business against adverse currency fluctuations, we offer various options. 1. Forward exchange contracts 2. Currency options Forward exchange contracts A forward exchange contract protects you against adverse currency movements. A forward exchange contract is nothing more than the buying or selling of a certain amount of foreign currency on a specified future date. Through a forward exchange contract you fix the rate of a specific amount in a foreign currency. This guarantees the amount you pay or receive. Suppose you have agreed with your supplier that you will pay in dollars in three months. With a forward exchange contract you do not need to worry about the exchange rate. Even if the dollar appreciates, you have the assurance that you will not have to pay your supplier a higher amount in euros. Indeed, you have hedged the risk of a rise of the dollar. You can do the same with your own foreign customers. When a forward exchange contract specifies that your customer will pay you in a few months, you may include that the rate of a certain date applies. This way, the risk of fewer earnings than expected is hedged. A forward exchange contract is a simple solution to protect you against adverse price movements. You know exactly how many euros you sell or purchase your products for. The drawback is that you cannot take advantage of favourable price movements. A currency option is a good tool to take advantage of favourable price movements. 9

10 Currency options A currency option buys you a right. You pay a premium in advance. You hedge your risk, but it allows you to take advantage of a positive price movement. We offer two types of trading options: call options (right to purchase) and put options (right to sell). The buyer of a call option acquires the right to purchase a currency at a fixed price on a certain date (expiry date). The buyer of a put option acquires the right to sell a currency at a fixed price on the expiry date. Hedging the dollar risk through an option In three months you must pay your supplier in the United States an amount in dollars. You wish to hedge against an appreciation of the dollar, but also wish to take advantage of a possible fall of the dollar. Therefore, you buy a call option on the dollar. That gives you the right to buy dollars in three months at a predetermined price. This is referred to as the exercise price. You pay an option premium for that. On the agreed date, there are two possible scenarios: 1. The rate of the dollar is higher than the predetermined rate. You exercise your option. After all, you can purchase dollars at the exercise price, which is lower than the current dollar rate. 2. The rate of the dollar is lower than the predetermined rate. You do not exercise your option. You purchase the dollars at a lower rate than the current rate. 10

11 Speed The speed of international payments may be the decisive factor when doing business with foreign suppliers. Therefore, our network is set up to make payments for you as quickly as possible. Supervision NBWM holds a licence from both De Nederlandsche Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM). To obtain and maintain these licences we must meet the strict requirements set by DNB and AFM. Security Your money is deposited in an account of the Trust Accounts Foundation. As a result, your funds have additional protection. The money can be transferred from your account with the Trust Accounts Foundation to any account of your choice. The Trust Accounts Foundation has accounts with ABN AMRO and Rabobank. Free account for all your currency transactions Would you like to take advantage of the benefits of NBWM? It is easy and free. Just remain with your own bank and open a foreign exchange account with us. Opening and maintaining your account is free of charge. Would you like to directly apply for an account? Visit 11

12 Contact Would you like to know more about the possibilities of NBWM? Are you interested in spot transactions, forward transactions or currency options? Or would you like to receive more information about our services? Please contact us. We would be happy to give you more information. Dutch Payment & Exchange Company Beursplein JW Amsterdam T: E: info@nbwm.nl W: /en Disclaimer All information in this brochure is intended for information and/or marketing purposes only and should not be considered any form for advice, recommendation, trading idea or any type of encouragement to act or invest in a particular manner. NBWM is not liable for any type of damages or losses based on a perceived recommendation or advice.we do our best to ensure that all information in this brochure is correct, however it can happen that information can be incorrect or outdated. NBWM cannot be held liable for any losses suffered as a result of this. This brochure is intended for personal use only and all information in this brochure, including design, logos etc., belongs to NBWM.