What is a spot payment?​

A spot payment/contract is an agreement to buy or sell foreign currency at the current exchange rate with a payment deadline of two working days. Monetae can help with international spot payments as well as a larger range of currency contracts.

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What are the benefits of a spot payment?​

Agreeing on a spot contract allows you to secure the current exchange rate and make the payment without establishing any exchange rate objectives that may not be fulfilled. Spot payments are immediate, so your company is aware of its costs and currency risk as soon as the transaction is completed.

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What's the difference between a spot and a forward exchange rate?​

The current exchange rate at which you have agreed to a deal is known as the spot rate; on the other hand, the forward exchange rate is a rate that you may lock in for a specific period of time. This means that any changes, either up or down, would not affect the rate you had locked in when agreeing a forward contract.

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Why would I need a spot contract?​

Since currency rates are subject to sudden changes, booking a spot payment lowers your risk by securing your rate of exchange for up to two days. For instance, on September 23 2022, the UK government announced their mini-budget. GBP/USD was trading at 1.12 before the news, and it rapidly dropped to 1.03 immediately after it was announced. Prior to the mini-budget, clients who made a spot deal would be completely shielded from this type of market volatility.