What are the different types of FX payments? Discover forward contracts, spot payments, and more with a trusted FX solutions company.
Universal Partners London is an award-winning payment specialist UK, redefining the finance industry through intelligent, client-led solutions. Driven by advanced technology, deep market expertise and a commitment to real partnership, we design solutions around your business ambitions to keep you moving forward.
Our services include mass FX payments, spot payment transactions, payment hedging, asset finance, invoice finance and international currency exchange, enabling us to serve as a complete finance solutions company. As a trusted FX provider London and payment solutions company, we enable businesses to boost bottom-line profits and reach new heights in the future.
When it comes to managing FX payments, there are a bunch of different options to choose from. The best one for you will depend on how often you make cross border payments and how much you spend on them each day.
Forward FX Contracts
As a trusted FX solutions company and foreign exchange company, we offer forward contracts that allow you to exchange currencies at a predetermined rate on a future date. These one-time payments are set to be processed later, and the exchange rate is fixed at the time of contract agreement. Businesses use forward contracts to avoid costly exchange rate changes and secure cheap exchange rates in advance. However, if the rate improves, you’re still locked in at the originally agreed rate.
For example, if the euro dips to 1.10 euros on February 15th, you can set up a forward contract for March 1st. If the rate bounces back to 0.90 euros, you’re still locked in 1.10 euros. If the payment is for 1,000 euros, you lock in £909.09 versus £1,111.11, saving over £200.
Forward contracts is a popular tool among UK currency exchange clients and forex traders, helping them make the most of strong exchange rates even if payments are far out. Use case: Businesses wanting to protect against future volatility. Example: A company agrees in July to pay £100,000 in October at a fixed rate. Hedging against currency risk. Less flexible if the market rate moves in your favour later.
Limit Orders
Limit orders are a strategic tool for forex trading and are frequently used by savvy forex traders and currency brokers. These allow you to buy or sell currency when a specific exchange rate is met. For Example: A company sets a limit to buy USD only when the GBP/USD rate reaches 1.35. The advantages are that you can potentially get a better rate, however there’s no guarantee that the rate will be reached.
FX Options
As an experienced FX broker London, we also provide FX options, which give you the right (but not obligation) to buy a currency at an agreed exchange rate at any future date. The provider charges a premium for the swap. Expiration dates prevent holding options indefinitely. If not exercised, the option expires, and the premium is lost. A new contract can be drafted with an updated exchange rate.
For instance, if the current exchange rate is 1.1 Euros per US dollar, an option might be to buy 110 Euros for 100 US dollars, expiring in six months. Six months later, the Euro’s value improves, and 1 US dollar is worth 0.9 Euros. If exercised, the swap yields 110 Euros for 100 US dollars instead of 90 Euros.
However, if the Euro’s value dips, the option expires as the current exchange rate offers more Euros. This method is widely used by companies needing flexible forex solutions while maintaining some protection against adverse currency moves.
Pros: Protection with flexibility. Cons: Usually involves an upfront premium.
Recurring FX Payments / Regular Transfers
Many businesses use our services to transfer money abroad regularly—such as payroll, supplier payments, or subscriptions. These automated recurring FX payments reduce manual effort and ensure timely execution. Automated payments in foreign currencies can be managed at set intervals (weekly/monthly).
For example – paying international employees, rent, or suppliers regularly or a remote company paying overseas contractors monthly in local currencies. It is convenient and cost-effective but still subject to exchange rate changes unless paired with hedging. Pairing regular transfers with hedging tools like forward contracts helps lock in cheap exchange rates, reducing long-term currency risk for UK currency exchange clients.
Spot FX Payments
Spot contracts are the most common type of FX payment/forex trading London. They’re like a one-time payment where you exchange currencies right away, usually within two business days. The exchange rate is set on the day you make the payment, so it’s a fixed amount. Processing times are usually quick, between one and three business days, which makes them great for urgent payments.
If you’ve ever used a credit card in a foreign country, you’ve probably done a spot contract FX payment. Spot contracts are best for businesses that don’t make a lot of FX payments. They can be a bit risky because exchange rates can fluctuate, and the costs can vary, but they’re easy to set up and don’t require much knowledge or effort. As an FX broker, we enable spot payments that are fast, easy, and cost-effective
Bulk / Mass FX Payments
Our services also support bulk FX payments which allow multiple FX payments to different recipients or in different currencies made at once. Can be used for payroll, refunds, or supplier payments across multiple countries. It is useful for a firm paying 100 freelancers in 10 different currencies.
While it is efficient, saves time and transaction fees it also needs a reliable platform or provider. Working with an experienced FX broker London ensures smooth execution, lower transaction costs, and scalable growth for international businesses.
Currency swaps
Currency swaps are completed before sending money, allowing payments in the destination currency. The three steps are:
- Initial exchange based on the contract’s start exchange rate.
- Interest payments throughout the contract at the agreed-upon interest rate, usually determined by currency rates. One party may pay a fixed rate, while the other pays a variable rate like LIBOR.
- Final exchange at the initial exchange rate.
Currency swaps act as a two-way loan, where both parties pay interest on the received foreign currency. This allows access to the currency needed while benefiting from favourable borrowing terms in foreign markets.
Typically, one party makes FX payments and another receives them. However, swaps can also be used for borrowing foreign currency for investments or financing. They’re best for businesses expecting large FX payments in each period. For example, if you’ll make 100,000 euros in six months, consider a swap for that amount.
These tools are especially valuable for businesses that rely on ongoing forex payments as part of their financial planning. As a seasoned FX solutions company, we provide access to flexible currency swaps tailored to your needs.
Cross-Currency ACH Payments
A low-cost alternative for sending smaller, non-urgent FX payments. It is ideal for non-critical B2B payments or recurring remittances or paying an international invoice without using expensive SWIFT transfers. It is cheaper than wire transfers but has slower processing (often 2–5 days).
Working with a trusted foreign exchange company ensures smooth, compliant, and affordable payment processing with access to cheap exchange rates across multiple corridors.
With the current volatility, contacting a currency specialist will allow you to safeguard your business and finances by planning ahead. If you are a business transferring funds overseas, get in touch with Universal Partners and our dedicated team to discuss the latest market movements ahead of your currency exchange. Universal Partners FX can provide invaluable help on efficient risk management, payment and finance tailored solutions to your business’ transfer needs.
