Foreign exchange (FX) pricing is shrouded in mystery. It seems simple. Banks establish their FX wholesale spot rate daily. They then apply a mark-up to price FX trades with corporate customers. What’s confusing are FX margins. They are neither fixed nor disclosed. FX pricing is adjusted on a transaction-by-transaction basis to reflect a customer’s size and competitiveness. Only corporations that deal in volume and comparison shop are assured of consistent and competitive FX pricing.

The hidden mark-up pricing model has worked well for the banks because, until now, there’s been no alternative. Until now, there’s been no easy way to fix FX margins.

CBI stands the current FX pricing model on its head by offering fixed mark up pricing. We call this program FXFix . Mark-ups are “big box” lean and savings increase with transaction size:

Does FXFix represent a cost saving opportunity that you should consider pursuing? Here are four points to ponder:

1. FXFix pricing is transparent. Margins are disclosed. No other FX provider can make this claim.
2. FXFix is offered through Laurentian Bank, a Canadian Schedule A Bank, not an intermediary. There are no settlement issues or security concerns to worry about.
3. With FXFix you deal directly with Laurentian’s FX trading desk, not a dealer or commercial banking center.
4. FXFix has no hidden service fees or wire transfer charges to claw back FX savings.

Is this worth a second look? To help you decide, check out CBI’s Foreign Exchange Calculator. This calculator will let you benchmark an FXFix quote against an FX quote from your own bank on a real time basis. It will also tell you the mark-up, in basis points, on each quote.

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