Pricing

Price-walking refers to a situation where the rate or margin you receive may change over time, particularly under relationship-based pricing models. This can make it harder to assess whether you’re consistently getting a competitive rate.

To avoid this, businesses should regularly compare their rates against the mid-market benchmark. Platforms like Alt21 help by providing transparent, real-time pricing, so you can see the full cost of each trade before confirming.

Better is subjective and context-dependent but it’s broadly true that a broker will be more efficient than a bank, and thus offer cheaper international transfer fees. However, traditional brokers still rely on manual relationships and sales commissions, which means their spreads are usually higher than those of a purely automated platform. They also often lack the self-service tools and direct accounting integrations that a modern hedging platform provides.

The difference is purely structural. Banks have massive overheads, including physical branches, thousands of employees, and manual compliance processes that make serving SMEs expensive. Alt21 is a technology-first platform that uses straight-through processing (STP) to automate the execution of trades. Because the cost of executing an automated trade is nearly zero, those savings can be passed directly to the business in the form of tighter spreads.

Banks and many brokers typically prefer the spread model because it is less obvious to the client. A £15,000 transaction fee would likely be questioned by a finance director, but a 1.5% decimal difference in an exchange rate is more likely to go unnoticed. Transparency in pricing allows businesses to compare providers more accurately and reduce foreign exchange costs over the long term.

An FX spread is the difference between the price at which a provider buys a currency and the price at which they sell it to you. In the wholesale market, banks trade at the “mid-market” rate. When they offer a rate to an SME, they add a margin (the spread) to that rate. This margin is how the provider makes money, but because it is integrated into the exchange rate, it does not appear as a separate fee on your bank statement.