SMEs can count the savings, FXA says (hktdc.com)


	FXA World (HK) Ltd Chief Executive Santhanam K says Hong Kong is ready for his innovative trading platform

UK-based online Trade and Currency Exchange provider FXAWorld.com has recently set up an office in Hong Kong, attracted by the city's large presence of small and medium-sized enterprises (SMEs).

FXA World (HK) Ltd Chief Executive Santhanam K described FXAWorld.com as the "the first foreign currency exchange system to allow individuals, companies and groups of all sizes to exchange currencies at or close to inter-bank rates". It was voted Innovator of the Year 2005 by UK publication Total Business.

Mr Santhanam said it was logical to set up in Hong Kong as the FXA World platform is ideally suited to an environment which is populated by SMEs, and where international trade is conducted. Added to that is the internet-savvy community. The mix of these factors gives room for trade and currency services that are efficient, cost-effective and secure, he said.

"Hong Kong fulfils all these requirements plus it is also a price sensitive market. SMEs here would grab any opportunity to save cost a lot faster than their counterparts in Europe or America, as businessmen in this part of the world work on thinner margins. As our system offers a savings potential for our clients irrespective of the volume it is attractive to SMEs, where typically transactions are high and value is low. In such a scenario, they can make substantial savings simply by eliminating a middleman."

Mr Santhanam explained that FXA World is not a bank but a facilitator. Its cost efficiencies work two ways, benefiting both the companies that use the services and their customers making transactions.

"By using FXA World's web-based auction model with an integrated settlement system, this not only lowers the cost significantly but also allows counterparts to name their own price by establishing an inter-client rate that will often be better than rates offered by banks."

He pointed out that FXAWorld.com was simply replicating in cyberspace the person to person (P2P) concept popularised by global market sites such as eBay.

"We are extending the same idea to foreign exchange, allowing individuals and businesses to buy and sell currencies in a controlled, secure environment but without the costs typically associated with currency brokers."

FXA World currently has over 2,000 members around the world mostly from the US and Europe.

Are companies in Hong Kong ready for such a new financial concept?

"Certainly, given the cost savings that could accrue to SMEs," Mr Santhanam replied. "Further, we are just creating an option for our customer: if the exchange rate is cheaper for a particular deal, you can use us. Membership is free."

On security, FXA UK has blue chip partners such as the Barclay's Bank and is governed by UK regulation. The deals are transacted within a secure infrastructure provided by Barclays Bank and members are allowed to operate their accounts 24/7.

Mr Santhanam added: "As a focal point for trade between east and west, Hong Kong was a logical location for the expansion of FXA World." The company has offices in Chicago, Dubai and New Zealand in addition to headquarters in the UK.