A bank or payments account that holds balances in several currencies at once. A business can receive and keep foreign currency until it needs to pay in that currency, which avoids converting twice and works as a simple natural hedge.
Reducing currency risk by matching revenues and costs in the same currency, so gains and losses offset without a financial instrument, for example, paying suppliers in the currency you also earn.
Read full definitionThe degree to which a business’s financial results are affected by exchange-rate movements. It arises from foreign-currency sales, purchases, assets, liabilities or forecast cash flows.
Read full definitionThe current market exchange rate at which one currency can be bought or sold for immediate delivery. Spot trades typically settle two business days later (T+2).
Read full definitionA network used for electronic payments and money transfers. ACH is popular in the United States for domestic transactions, including direct deposit, payroll and bill payments.
Read full definitionBankers’ Automated Clearing Services, the process for making sterling payments via domestic UK banks. Mostly used for direct credits and direct debits, BACS payments tend to take three business days to clear.
Read full definitionAlso known as a SWIFT code, a standard format used to identify a specific bank during an international transaction.
Read full definitionThe movement of funds from one entity to another. When moving cash from one country to another, the term is often used interchangeably with currency transfer, foreign exchange and currency conversion.
Read full definitionClearing House Automated Payment System, a faster way of making sterling payments that are usually cleared on the same working day.
Read full definitionAn organisation, institution or third party that settles a financial obligation between a buyer and seller, ensuring all parties honour and settle the agreements they have committed to.
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