European import companies with production sites in Africa, Asia, or Latin America often encounter conversion costs when paying in euros. "The local banks know you have nowhere else to go, so you're at their mercy," says Laurens Maartens of StoneX, a company specialized in cross-border payments to less common currencies.
"Our strength is our corresponding bank network. When you want to convert currency, there'll always be an exchange. Not nearly every bank can do that. When you don't have that relationship, you have to look for a bank that can help you. We directly partner with local banks in Africa, Asia, and Latin America, and thus we can always offer the best rate in the local currency. Moreover, we can guarantee payments are made on the correct currency date."
Best exchange rate
"The advantage of taking links out of the chain is that companies have lower costs, and there's less chance of errors: we remove several of these links. Also, thanks to our network of banks, we can guarantee an improved exchange rate. We put out a tender, as it were, so we can always guarantee the best exchange rate," says Laurens, who is StoneX's Business Manager in the Netherlands.
StoneX began 30 years ago when its founders, who worked at a large bank, had to convert a hard currency into an exotic one for a charitable foundation. "They discovered, in practice, that many links were needed to get the financing done. They saw opportunities in that and, so, made it their business."
"Many banks don't have those relationships with the local banks anymore; it's not profitable enough for them. We, therefore, now take care of back-end payments for large international banks when they don't have a corresponding bank in their network," Laurens explains.
Over the last three decades, StoneX has built a huge network of local banks all over the world. It now handles transactions for the largest international banks, including a major Dutch bank and the United Nations (UNICEF, WFP, WHO). They also help more than 500 non-profit organizations across the globe.
"We gain trust thanks to not only our expertise and network, but our service and very competitive rates, too. Nowadays, we provide payments in more than 175 countries with more than 140 different currencies."
"Brazil is a great example of a country where we can provide our customers with additional services. We have a branch there, and that lets us help entrepreneurs with both incoming and outgoing funds. We also take care of all the paperwork, and we're setting up shop in Colombia. We should open that in 2022," says Maartens.
"We can realize significant savings for European companies too, for example, those that import and export fruit, vegetables, and plants, with our without their own branch. That involves truly substantial amounts, especially for companies that have production facilities."
"Payments must be made in the local currency, and many businesses don't realize how much money they can save," Laurens adds. "Often, importers habitually make their payments in euros and dollars. They don't even know they can pay in local currency."
Laurens calls on international fruit, vegetable, and flower trading companies to give StoneX a try. "Comparing costs nothing. We give clients an exchange rate. They, thus, know in advance how much they'll have to pay to meet their obligation. Our service is very transparent. We add no additional fees, commissions, or other costs," he concludes.