As a specialist institution offering vast flexibility to businesses in terms of managing international payments and cash-flow on a global scale, Western Union Business Solutions (WUBS) has found itself well positioned to service the local business community during these uncertain times.

Globally, Western Union has been in the business of facilitating international payments for over 169 years and is one of the oldest listed companies on the New York Stock Exchange. Locally, the firm’s history began under a different name, and through a series of acquisitions, WUBS today counts local businesses, both large and small, as clients - from the iron monger in the village centre, to iGaming, manufacturing, pharmaceutical and aviation companies.

WUBS offers highly targeted services, and benefits from having access to the global infrastructure of WU’s international network despite Malta’s limited market size.

WU money transfer, the service everybody is familiar with, has a direct agent locally, while WUBS, the financial/specialist institution, is headed by Country Manager and Executive Director, Mark Anthony Camilleri.

“At the end of the day our reach is global, and we have correspondent banks everywhere,” says Mr Camilleri, at a time when another international bank has announced its intention to sever its correspondent banking relationship with Bank of Valletta.

“Of course, this helps businesses to maximise efficiencies, as they are being given access to all markets, not just Malta, through a firm that is plugged into platforms where global investment is taking place.”

With services such as credit facilities and the provision of holding balances – where clients can keep money with WUBS for a maximum of 90 days to affect future payments, Mr Camilleri is asked how, exactly, WUBS differs from a traditional bank.

“Apart from the fact that we do not do savings accounts or deposits, and we can only retain funds in an account for 90 days, our focus, expertise and investments are solely on currency and payments. Banks carry out loans, deposits, and a whole array of other services – their focus is everything.

“Our focus is just payments, finding banking partners to serve our clients well within the competition there is around us,” he remarked.

Currently, WU international covers 200 countries/territories with 130 currencies, and has over 60 global banking partners as well as over 500 bank accounts. Locally, WUBS is experienced in keeping a close eye on international currency movements, which stands to impact clients’ businesses and risk strategy.

As for its contribution to local businesses in terms of facilitating US dollar payments, Mr Camilleri highlights how many do not appreciate the vast range of transactions across the globe that are carried out in US dollars.

“Sometimes we do not appreciate just how much is traded in US dollars, for example, oil, sugar and other commodities that come from the earth are mainly traded in dollars.

“Now you can pay in euro, for example, but you will be paying a higher price, as the market out there is based in dollars and brokers put up prices to cover any FX conversion costs. I do not know of anyone not doing dollar payments, in one way or another.”

In fact, almost 40 per cent of all global cross-border transactions are exchanged in US dollars, while more than half of goods imports arriving into the EU are invoiced in the same currency.

The dominance of the US currency doesn’t just stop there and extends much further when looking at financial markets. Nearly two thirds (63 per cent) of global debt is denominated in US dollars, and dollar-denominated debt held by non-banks outside of the US exceeds $11 trillion, the equivalent of 14 per cent of world GDP.

Here, again, WU is well placed to plug the gap left by correspondent banking shortcomings in local traditional banks. Being an American company, it always has access to the US dollar and even provides solutions to local banks with difficulties in this regard.

Together with its FX risk management services, platforms clearly displaying movements and flexibility through the provision of services such as forward contracts and FX exposure analysis, Mr Camilleri stressed that clients are truly left with more time and energy to strategise and grow their business.

Homing in on the importance of reliable risk management, Mr Camilleri highlighted the effectiveness of WU’s platforms, adding that they are friendly to corporate clients and work well in FX risk management.

“We have a platform where you insert the invoices coming, dues and incoming payments, and it gives a calculation of all FX exposure in the company, making it easier to protect your costs, by buying a forward contract, or placing a market order to hit your cost rate. Updates are provided daily, whenever the client needs it.

“This service is growing because, in the case of Malta, people were not so aware of the tools available. Our Client Relationship Managers are available to make clients aware of all products on offer and how we can help.”

While COVID-19 has disrupted industries across the board, the shift towards digitalisation has caused more businesses to inquire and seek out tools available.

Mr Camilleri stressed that WUBS does not issue advice, but informs the client of what is happening in the world, empowering them with the right knowledge to take decisions and carry out different scenario planning during these unstable times.

Turning to COVID and its impact on WUBS, Mr Camilleri was pleased with the smooth transition to a full remote-working set-up, and the partial transition back. In terms of how the pandemic has impacted the company’s business from a client perspective, he said that WUBS digital and flexible services had become more essential, resulting in a busy period.

Asked about any advice to businesses which are not coping with planning for an uncertain future, Mr Camilleri highlighted how for those companies with cross-border, cross-currency needs, FX scenario planning and analysis is an effective tool showing the possible outcomes in such a volatile currency market, helping clients to form a wider picture of the future.

“If this process uncovers that your company may be exposed, you may consider developing a counter strategy. Consider seeking further guidance on what types of currency products and strategies are available for companies with material foreign exchange needs.”