What is currency risk? How exchange rate moves hit small businesses
By SendPay Business · · 2 min read
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Currency risk, or FX risk, is the chance that a move in exchange rates changes how much you earn or pay. Any business that sells to, or buys from, another country in a different currency has some.
A simple example
A UK business agrees to be paid 10,000 US dollars in 60 days. On the day it agrees, that is worth about £7,700. If the pound strengthens before the money arrives, the same 10,000 dollars might convert to only £7,400. Nothing about the sale changed, but the business earned £300 less.
Common ways to reduce it
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Weigh up the cost
Each option has a trade-off. Pricing in pounds can put off overseas customers, and forward contracts lock you in even if the rate later moves in your favour. Many small businesses start by holding balances in the currencies they use most.
Where SendPay fits
SendPay platforms can give your customers GBP, EUR and USD accounts, so they can hold money in the currency they are paid in and exchange it when they choose, at a fee you set. SendPay doesn't offer forward contracts.
How it works
Your own money app- 1Name it and pick your colours
- 2Choose what it does
- 3Launch when you are ready
Why sign up
Create your free SendPay account
It's all about creating your own financial platform with ease. Start with a free account today.
- 🪪A free business accountOpen it in about a minute with your business name, email, password and mobile. No card and no documents to start.
- 💳Get paid from day oneTake card payments, and share your own payment link and invoices so customers pay in a click.
- 🌐A free business websiteFree to build, free to publish and free to keep, with unlimited visits.
- 🚀Your own financial platformDesign and preview your whole platform free, then launch when you are ready.
SendPay Business is a technology company, not a bank. Accounts, cards and payments are powered by licensed partners.
Questions people ask
Should I fix all, none or part of a foreign bill?
Compare the outcomes as exchange rates move.
Currency hedge calculator →What is a forward contract?
An agreement to exchange currency at a fixed rate on a later date.
What is a forward contract? →What is a multi-currency account?
One account that holds several currencies.
What is a multi-currency account? →Read next
Spotted a mistake or something out of date? and we'll fix it. How our guides are made
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.