Spot & Forward Contracts

In 1914, a series of events plunged the world into a scale of war unprecedented in human history. World War One was a defining time that saw the globe, its people and its businesses evolve to face unchartered challenges. Little known is the security and relief that FX payments provided during this time. The bank draft hero As tensions escalated between Europe's great economic powers, most local banks stopped honouring foreign letters of credit. Since pioneering the improved security of foreign payments in the 1800s, American Express was equipped, established and one of the few providers to continue facilitating crucial international payments via cash drafts. Initially, this service provided relief to nearly 150,000 travellers and troops stranded on the continent without access to funds. Then, as war raged on, the company was appointed an official agent of the British government, tasked with delivering relief parcels, letters and money to British prisoners in Bulgaria, Germany, Holland, Norway, Switzerland and Turkey. American Express employees were also authorised to access prisoner of war camps and arrange for British and French prisoners to access cash drafts. American Express Service Poster, July 1917 American Express Foreign Exchange Booth, Paris Payment advances The cash draft used in these dark hours continues to be a common payment method today, used to settle foreign exchange spot contracts. That is, contracts for almost immediate settlement, entered into between you and a foreign exchange provider. Simple to understand and execute, spot contracts provide a quick exchange of funds - suitable if you're exposed to short term transaction risk. Now, times of economic risk can be mitigated via the use of forward contracts: agreements to buy or sell a certain amount of a foreign currency at a fixed rate of exchange at a future date. We continue to improve the security and efficiency of international payments and foreign exchange transactions for Australian businesses looking to grow in the global marketplace. Learn how our promise of good relationships and rates supported those facing the world's first taste of the volatility now seen in the modern FX market >