Foreign exchange company

A non-bank foreign exchange company also known as foreign exchange broker or simply forex broker is a company that offers currency exchange and international payments to private individuals and companies. The term is typically used for currency exchange companies that offer physical delivery rather than speculative trading. i.e., there is a physical delivery of currency to a bank account.

Foreign exchange companies are normally distinct from money transfer companies or remittance companies and bureaux de change as they typically perform high-value transfers unlike their money transfer counterparts that focus on high-volume low-value transfers generally by economic migrants back to their home country or to provide cash for travelers.

Contents

United Kingdom

It is estimated that in the UK, 14% of currency transfers/payments[1] are made via non-bank Foreign Exchange Companies. These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. The 10 largest companies in the UK by net profit as at November 2010.[nb 1]

No. Company Accounting Date Pre Tax Profit
1 Travelex[nb 2] 31 December 2009 £10m (estimate)
2 Moneycorp[nb 3] 31 August 2009 £7,264,000
3 HiFX 30 June 2010 £3,583,000
4 Currencies Direct Ltd[nb 4] 30 June 2009 £3,178,000
5 World First UK Ltd 31 January 2010 £2,172,496
6 Foreign Currency Direct 31 October 2009 £1,886,165
7 Global Currency Exchange Network 31 March 2009 £1,717,169
8 No1 Currency Ltd[nb 5] 31 March 2009 £1,679,483
9 AFEX 31 December 2009 £1,166,514
10 Corporate FX 31 December 2009 £648,000

See also

Notes

Footnotes

  1. ^ All UK currency brokers must be Authorised as Payment Institutions by the FSA. This list is publicly available on the FSA website. All UK companies must also submit their full accounts to Companies House. The accounts of all the authorised payment institutions were checked with Companies House on the 18th November 2010 to create this list. The UK's Companies House website http://www.companieshouse.gov.uk/. Measured by pre-tax profit as turnover is not available for all companies.
  2. ^ It is difficult to tell the exact revenue generated by Travelex from their private and corporate foreign exchange due to the number of entities and business areas they have. £10m is an estimate although the group parent entity Travelex Holdings Ltd posted a loss of £150m for the year to 31st December 2009.
  3. ^ TTT Moneycorp Limited also has high-street and airport/station bureaux de change. This profit figures includes that profit.
  4. ^ Currencies Direct accounting date changed from 30th April to 30th June. This period is thus 61 weeks. Annualised Net Profit is £2,709,115
  5. ^ Previously The Xchange Business. This includes net profit from cash bureaux de change offices.

References

  1. ^ The Sunday Times (UK), 16 July 2006