Thursday, 11 February 2010

A rant about Foreign Exchange providers

I haven't had a real rant on my Blog for ages, so here's one about an issue that has been getting me mightily het up recently (I'd prefer to use language a bit more colourful, but this Blog is in the public domain)....... Bloody foreign exchange providers! Grrrr!!

The life of a wine importer presents many obstacles (not least of which for me is my poor mastery of the French language - a not inconsiderable problem, seeing as I import wines from France). An even bigger problem, though, is the process of paying for the wines. As what can best be described as a small-scale importer, I like to think I have nurtured good relationships with most - if not all - of my numerous suppliers, and one of the things I pride myself on is paying them on time. Although one or two of the more highbrow growers seem to have an inherent distrust of wine merchants (and especially small, relatively unknown ones like me) and demand payment for their wines before they are shipped, most of my growers give very generous payment terms. Some give 30 days, many give 60, and some even give 90 days - 3 months, for goodness' sake! So the very least I can do is to pay them on time. In actual fact, one of my growers (who, without giving too much away, also happens to be English) goes as far as telling me that I am one of the few merchants he enjoys dealing with - because I am one of the few who does pay on time!

The idea of paying my creditors is certainly not a problem for me. But the process of actually getting the money paid into their accounts has become somewhat of a recurring nightmare. In my time in the wine business (6 years and counting) I must have used the services of getting on for 7 or 8 different foreign exchange providers (once I learned that dear old Barclays Bank were only ever out to fleece their customers for as much commission as they could get - and a rubbish exchange rate). One thing I could say about Barclays, though, is that they were reliable - if I made a Euro payment, it got paid on time. But using specialist foreign exchange providers (or ForEx traders, as they are known) has just as many pitfalls. In the current economic climate, there is no absolute guarantee that the money you pay them will actually reach its intended destination.

But the current economic climate also dictates that they are all desperate for business, even from relative small fry like me. When I receive their cold calls, they all tell me that they can offer the keenest deals on the prevailing exchange rates (very important, when making payments of thousands of Euros, and vital in keeping my retail prices down) and that - having given me what is often a pretty good deal - the next time will be just as good. Problem is, with each successive deal, the rate gets worse and worse. I won't name names (I'm sure these people wouldn't take too kindly to bad publicity) but the last-but-one ForEx provider I used offered me pretty much the going rate - i.e. not too much worse than the official exchange rate at any given time - for my first transactions(s). But with each subsequent transaction, the rate got steadily worse. My patience snapped the last time I called them, when the published rate was around 1.15 Euros to the Pound, and they offered me around 1.13. "Thanks, but no thanks" was my answer. So I found another provider, who offered me a reasonable (though far from ideal) deal on some relatively small payments that I needed to make to three different growers. That was on 22 January. Job done...... or so I thought.

Fast forward to around 4.30 pm this afternoon, when I received an email, informing me that the payments had just been made...... over two-and-a-half weeks late. "Should you have any queries regarding your payment please do not hesitate to contact us", the email said. "I certainly do have a query", went my reply. "....can you please explain why it has taken almost 3 weeks to make the payments to my suppliers?"

Back came the reply "I am very sorry for the late payment. I must be honest and admit fault – ****** did forward me your instructions on the 22nd January but I for some reason missed them and didn’t print them off. This has never happened in the past and I feel very embarrassed that it has. I am more than happy to contact your suppliers and explain what happened and apologise to them. Again I am very sorry and would like to say that this in no way reflects the way our company operates and I promise you that it will never ever happen again. Please don’t let this error effect (sic) the relationship. I hope you will continue to use us. Kind Regards" (name witheld, for obvious reasons).

Needless to say, I shall contact my growers personally, in order to apologise for the fact that (through no fault of my own) they have not been paid on time - and hope that our relationships have not been soured by the situation. And needless to say, I will not be using the "services" of this particular ForEx provider again. Onto the next one, I guess.....

So if anybody reading this has any recommendations for reliable (and reasonable) ForEx providers, who are looking to build long-term relationships with small merchants like me, please do let me know. Little acorns, and all that......


Graham said...

Just an idea, but if your cash flow can take it you could open a French bank a/c to pay your vigneronnes etc. You should then be able to make fewer transfers for larger amounts to a single account and get a better rate.

Leon Stolarski said...

That is something I have often considered, Graham, although I have always been led to believe (via various discussions on the wine-pages forum) that it is not that easy to have a Euro/foreign bank account, if you are resident in the UK. If you know different, I'd certainly appreciate your advice.

AlanM said...

We have an acccount with HSBC based in Beaune, it's useful for us as we spend so much time there and need to pay deposits etc. I have to say the downside is the charging, around 10 euros a month, but for someone doing business that would presumably be different. No problem in running the account though.

Leon Stolarski said...

Thanks for that, Alan. Graham has also contacted me and recommended - so I will look into both options.

HamishWM said...

Hello Leon
I read your rant about FX companies with amusement. I have had very similar experiences over the last 11 years as a shipper/agent. I have used many companies, but CrossbarFX seem to be very reliable. They can do same day transactions to French accounts. They are a personable firm (not based in London). Email me if you want further contact details etc.

Leon Stolarski said...

Hamish - I'm not sure I have an email address for you. I do have a couple of other companies in mind for my next move, but will always be interested to know about other companies. Can you email me the details, please?

eurotravelmonkey said...

Hi Leon
Couple of points. I have a Euro account with Barclays in Paris. All set up paperwork was in English. My experience has been good, but the account manager aI have had is excellent and I think that's my experience is better than others'.
In order to transfer money I use HiFX, which is trouble-free (so far!) and seems to offer reasonable rates - certainly better than HSBC with whom I bank in the UK.
Ron Pelley