Improving Cross-Border Payments

Posted on Oct 21, 2021 by Samia Ferradj, Head of Sales Europe, FX Payments, StoneX

A conversation between Samia Ferradj, Head of Sales Europe, FX Payments at StoneX and Jean-Michel Godeffroy, Former Director General of Payment Systems & Market Infrastructure at the European Central Bank and Chairman of the Central Bank Payments Conference.

Jean-Michel Godeffroy (JMG): Could you please tell us about StoneX?

Samia Ferradj (SF): StoneX is a publicly traded company listed on NASDAQ, headquartered in New York, with 2,900 employees in 70 offices spread across five continents. It specialises in global trading, mostly in commodities but also in securities and currencies.

We do not speculate on currencies. Our “global payments” activity specialises in transferring funds to the developing world. It has progressively grown in the last thirty years to serve the needs of our clients, mainly banks (including 9 of the top 10 in the world, by FX market share), of course acting in their name or the name of their clients, but also NGOs, charities, international organisations, and more.

JMG: And central banks?

SF: Central banks often have important payments to make in a wide range of currencies, not so much for them, but mainly for their clients, and in particular for the central government. For example, many central banks are responsible for funding the country’s embassies all over the world. But this activity is not at the heart of their responsibilities, and they tend to rely on procedures put in place long ago and which have become inefficient over time.

So far, we only have a few central banks as direct clients. But those with whom we work have told us that they are pleased to work with us because we help them offer a better service at lower costs than the alternative solutions they have used before.

I see two reasons why our customer relationship with central banks is not yet what it should be: on the one hand we, StoneX, have not made ourselves sufficiently available to listen to central banks’ needs and to explain to them why and how we can offer first-class services at a very reasonable cost; on the other hand, central banks do not consider the processing of payments in what they often call “exotic currencies” as an important part of their activities. This triggers inertia, inherent in non-profit seeking companies, where it appears safer to “do as we have always done” rather than looking for innovative solutions with better service and better prices for their customers.

To illustrate this point: we have realised that many central banks already use our services indirectly because their currency provider is in fact one of our bank clients. In other words, in such cases when central banks use our services indirectly, they offer unnecessarily higher prices to their clients because of the existence of an intermediation layer that could easily be eliminated.

JMG: This is interesting: central banks which are currently looking for ways to improve the price and efficiency of cross-border payments often offer conditions which are suboptimal to their own customers, even with the existing standards. Therefore, I very much understand now why you are so keen to speak to central bankers at the upcoming Central Bank Payments Conference. However, central banks are not just interested in the quality of the service they receive. They want to know how this service is produced because they want to be able to evaluate their risks, if any.

SF: We are very transparent with our clients, and we are even more transparent with central banks. In the limited space that we have here today, I can only provide the main features. But we will be available to provide further details with central banks that are interested in knowing more.

In a nutshell, our main asset is our network of 350 correspondent banks that allow us to offer payment services in approximately 140 currencies. Our approach in each country depends on the currency regime. In some countries our correspondent is the central bank itself; in other countries we connect with several competing local banks. We have very close relationships with our correspondent banks which our employees visit at least once a year. Even if we aim at developing mutual trust through long-term relationships, we do not hesitate to change our banking relationships when we think this is needed.

JMG: Can central banks influence the choice of the correspondent that will be used?

SF: Indeed, central banks can inform us if they are not comfortable working with one of our counterparts. However, we only work with counterparts which are AML/CTF compliant.

JMG: Can you describe the payment process?

SF: It is very simple: our client contacts us with a payment order which includes an amount, a currency, and a beneficiary. We ask our correspondents in the relevant country for exchange rates, and we transmit our best offer to our client. This includes a small margin on top of the offer received from our correspondent. We do not charge any fee and the amount asked is exactly the amount paid.

Our client decides whether the rate we offer them is acceptable or not. At this stage, our client may seek alternative rates from other sources. In practice, most clients only check from time to time. Once the deal is done, we ask our correspondent to pay the funds to the beneficiary in the local currency, usually two days later as is currently the norm in foreign exchange markets, and we ask our client to cover us in dollars, euros … it is as simple as that.

JMG: You mentioned that central banks may seek alternative rates. Does it mean that you do not require exclusivity?

SF: Absolutely! First of all, our service can be customised to better serve the needs of our clients. Some central banks have specific relationships in some countries which allow them to obtain the best rates directly from the local central banks. Other central banks prefer to use the balances that they maintain, in particular in reserve currencies. In practice, we see only the transactions that our client entrusts to us and, as I mentioned, they may even contact one of our competitors in parallel to check that we have the best price.

JMG: Do central banks often put you in competition with other currency providers?

SF: Most of our clients do, but central banks are special. The relationship with them tends to be more difficult to establish and they typically test us at the beginning. But then, once they have measured how much they can benefit from us, in terms of price, speed of execution and quality of service, confidence grows, and they tend to entrust us with most of their foreign exchange transactions in “exotic currencies.” But they may, from time to time, compare our exchange rates with competitors.

JMG: Central banks are seeking ways to improve cross-border payments. Would these attempts not threaten your business case?

SF: We do not think so because if we are providers of currency services, we are also users of them. We are committed to offering the best customer services in a wide range of currencies and we welcome new initiatives to improve cross-border payments; we are keen to see new ways of making cross-border payments so that we always remain the most efficient company in our field of competence.

JMG: If a central bank wants to know more about Stone X and its global payment service, what should it do?

SF: I would suggest that they first look at our website to know us more and then if they wish, they may send a message to me at

About StoneX Global Payments

StoneX Financial Ltd's Global Payments team specializes in transferring funds to the developing world. We offer competitive and transparent pricing, along with guaranteed and secure delivery, in approximately 140 currencies across 170 countries. This includes a fully-fledged domestic payments capability for both in-bound and out-bound payments in Brazil.

We specialize in providing payments service and market intelligence to nonprofit clients such as international aid and development organizations, UN agencies, government agencies, NGOs and religious organizations, as well as to multinational corporations and financial institutions.

Our network of more than 325 correspondent banks enables us to engage in price discovery in over 180 local markets, bringing pricing transparency for local currency payments to our clients. we leverage the strength of our partner relationships to guarantee timely and secure delivery of payments – in the full amount.