FX & Cross-Border Payments · Use case

Hedge FX exposure programmatically

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Short answer

If you know you will pay or receive a foreign currency later, a forward contract locks today's rate. Providers expose forwards and spot trades through APIs, so hedging can follow your business data automatically — provided the provider holds the right permissions for the instruments it offers.

What this use case is

If you know you will pay or receive a foreign currency later, a forward contract locks today's rate. Providers expose forwards and spot trades through APIs, so hedging can follow your business data automatically — provided the provider holds the right permissions for the instruments it offers.

Who builds this

Platforms with foreign-currency payouts
Travel and events businesses
Importers and exporters
Treasury teams

What your customer sees

  1. 1Stable prices in their currency despite market moves

How FX & Cross-Border Payments solves it

1

Exposure identified from your data

Exposure identified from your data

2

Hedge policy applied

Hedge policy applied

3

Forward or spot booked via API

Forward or spot booked via API

4

Collateral or margin handled where required

Collateral or margin handled where required

5

Settlement on value date

Settlement on value date

6

Reporting of positions and results

Reporting of positions and results

Want to have

  1. Spot and forward trading via API
  2. Position reporting
  3. Settlement handling

Optional

  1. Limit orders
  2. Window forwards
  3. Automated rules

Design decisions

Instruments

Spot only
Forwards
Options

simplicity versus protection.

Automation

Manual
Rule-based

control versus scale.

What to put in your RFP

Instruments and tenors

  • Instruments and tenors

Permissions and regulator

  • Permissions and regulator

Collateral terms

  • Collateral terms

API and reporting

  • API and reporting

Pricing

  • Pricing
Add these to an RFP

How to evaluate providers for this use case

  1. 1Permissions
  2. 2Pricing of forwards
  3. 3Collateral terms
  4. 4Reporting

Pitfalls

  • Hedging without a policy
  • Collateral calls you did not plan for
  • Instruments offered outside the provider's permissions

What providers will ask you

  1. Exposure profile
  2. Hedge policy
  3. Volumes and tenors

Other Finlane categories that cover parts of this

This use case is solved mainly with FX & Cross-Border Payments. These categories cover specific parts of it and can be tendered alongside it.

Treasury & Embedded Investing

Corporate treasury management

Banking-as-a-Service

Accounts for settlement

Frequently asked questions

Other FX & Cross-Border Payments use cases

Pay international contractors and suppliers

Send local payouts in dozens of currencies with predictable fees and reconciliation.

Offer multi-currency accounts to customers

Give business or consumer users named accounts and balances across major currencies.

Collect from customers abroad locally

Receive payments through local rails and settle to your home currency automatically.

Scope hedge FX exposure programmatically with FX & Cross-Border Payments providers

Scope this use case