Can a smaller FX and global payments provider compete against the large and regional banks when it comes to buying and sending foreign currency payments to suppliers overseas? “Absolutely,” said Monex USA CEO John Doyle.
Has the FX marketplace already priced in impacts to the US dollar’s relative strength to other currencies from a Trump US election win? Tough to say for sure, opines Monex USA’s present and near-future online currency outlook, but the dollar has definitely been strong recently when compared to most other currencies.
Finextra sat down with Doyle at the AFP conference in Nashville, Tennessee, to talk about trends surrounding FX markets in the coming months and into 2025, and also ask about the competitive outlook for the US unit of Monex S.A.P.I, itself a leading bank, FX provider, and funding and leasing conglomerate.
Monex USA – acquired by its Mexican parent in 2011 - offers a full suite of spot and forward currency transaction capabilities, options, and advising assistance to its mix of small to large corporate clients - and financial institutions as well. Their offering also includes global payments and multicurrency accounts.
What’s Monex’s view on the impact of the US election and currency rates/futures? The company's website features a daily currency commentary and it noted the strength of the US dollar after the 21st October market close:
“Election premiums are now a main driver of USD pricing and look to continue to be so in the last 14 days before election day, though early voting has already begun in many places,” the website read. Based on current polls which show the two major candidates ‘neck and neck’, the company's outlook notes that “betting markets” favour former President Trump roughly 60/40. “The possibility of a second Trump administration, with all its promised tariffs and spending, has boosted USD in a major way over the last few sessions as such policies do risk a return of high inflation and, in turn, less room for the Fed to ease monetary policy,” the website added.
What about the USD’s value with a Harris win? “A Harris administration, by contrast, would align with a more steady path for USD rather than the potential for a renewed dollar resurgence that could be presented under Trump’s proposed policies.”
How does Monex compete with not only the major banks but also the many FX providers in the US marketplace? Doyle said the company’s first opportunities at new business often come through referrals, or from corporate finance officers with previous experience working with the company who join new firms and give Monex a call for comparative rates or global payment assistance.
“The relationship part is big. That's hard to establish these days, right? People don't pick up their phones. But it’s also our service, if something goes wrong” that brings clients back, he believes.
What are the main trends impacting foreign exchange markets and rates, as opposed to say the past half decade or so? “Everyone’s playing [the FX game now],” Doyle explained, as global commerce – helped by the increasing ubiquity of the internet – has opened up new commerce corridors and fresh bilateral trading relationships. He said advances in technology have also helped the company to keep up with more established industry giants, such as major global financial institutions. “It’s [the global payments marketplace] been changing faster than humans can keep up with - so I think speed of payment, speed of delivery, and accuracy are all much improved,” said Doyle.
His team members on the sales, operations, and trading side of the Monex USA business are finding they must be able to deliver to match increasingly elevated expectations of an ever-more demanding customer base. Thus, the former FX trader said, “three and six days to send a payment across the world is no longer considered a norm at all.”
While it used to be that individual and especially lower value foreign currency transactions were likely to be not only quite expensive but also quite slow to be completed and prone to even longer delays, that's just not the norm any more. Doyle said the bar for global payments and cross-currency deals is much higher now from clients of all sizes. “Consumer expectations are starting to level up to corporate standards,” he pointed out, not just from a pricing point of view, but also with some online cross-border payment transactions from ecommerce providers being processed in four hours.
What will keep smaller FX companies like Monex successful, driving continued growth and volume for the organisation in the foreign exchange and global payments game? According to Doyle, technology will help, but it’s still all about relationships no matter what ‘bells and whistles’ are introduced to the FX world.
“I think technology has helped increase the speed of payment, of course, but then also API integrations are important as well. Everybody is racing to make sure their online system is as good or better than the competition’s, and we're in that race too.” However, Doyle knows the value of currency trading experience coupled with the convenience and confidence provided by offering 1:1 consultations with Monex’s clients when they’ve got questions related to various payment options, currency trends, and transaction timing.
“We have the tech to do just about anything our clients want, yet - it's probably my bias from being on the dealing side with clients - we still need to make sure that the service is there on the human level, right? So that's a huge focus for us. It's great if you have the tools, but you still need to have that underlying relationship and trust with the client, and of course, you can do that with digital [trading]. But what if you [a customer] have a question?”
Many of Monex’s clients do have concerns about their cross-border payments. Perhaps they’re wondering about the relative benefits of issuing payments in local or base currencies, or choices impacted by current rates and the country and payee involved. That’s where the company’s sales and trading teams’ personal service and expertise in handling 130 currencies can often make the difference. As Doyle explained, some of Monex’s clients “just jump in” and self-serve their global payments needs, entering transactions online. But what if they have doubts - or technical or timing questions? “If they want to talk to someone, they can, with us, on any transaction size.”
Given the growing prominence in the financial world of various sorts of operational links and partnerships with other providers, does Monex find it more important than in the past to develop new or different ties to meet the expanding needs of their increasingly savvy and demanding client base?
“Absolutely,” said Doyle. “I think, back 10-15 years ago, we were dealing with maybe four liquidity providers [around the world], and a couple of payment providers to send everything on Swift. Now, we have had to expand upon that model and provide more [flexible] choices for clients whether they want, for example, some low value payments going out [via one local channel] or everything going via SWIFT.”
What does the future look like for Monex and its FX customers? Beyond those technical capabilities it all comes back to developing and maintaining that flexibility that leads to lasting relationships. Within that context, it’s about combining consistent service, simplicity, and experience, Doyle said.
“Maybe they want to know about hedging strategies. Some process payments right on the controller level, or maybe they do so via accounts payable.” No matter what or how Monex USA clients interact with their team, the CEO explained, “they want it to be easy, and we can deliver that - to around 140 different currencies – every day.”