Wise for Business Doesn't Do Forward Contracts. If You Have Real Currency Exposure, That's a Problem.
- The Blog Team
- Apr 15
- 2 min read
Somewhere in the UK right now, a Finance Director is paying a US dollar invoice ninety days from now and has absolutely no idea what it's going to cost in sterling. This is not negligence. It's a product limitation.
Why Forwards are a useful tool for clients
Wise Business doesn't offer forward contracts. No market orders, no mechanism to fix an exchange rate in advance. Every transaction happens at the spot rate on the day. Wise is transparent about this — their own guidance describes the product as a payment tool, not a hedging one.
For plenty of businesses, that's fine. If your FX exposure is small, infrequent, or genuinely unpredictable, spot trading is a perfectly sensible approach. For businesses with committed future payments in foreign currency, it isn't. The GBPUSD rate moved more than 12% in a single year in 2022. If you'd budgeted for a dollar payment at 1.30 and settled at 1.15, that's a 13% increase in your sterling cost. On a £200,000 order, that's £26,000 you weren't planning to spend.
A forward contract removes that risk entirely. You agree a rate today, the deal is done, and whatever happens to the market between now and the payment date is irrelevant to your P&L. Finance Directors who use them don't do so to speculate. They do it so they can actually forecast.
If you're managing FX through Wise and you have payments fixed in foreign currency six, eight, or twelve weeks out, your costs are genuinely unknown. That might feel like an abstraction until the day it isn't.
A fifteen-minute conversation with a specialist broker is a fairly cheap insurance policy.
Gareth Bowles, Director, Pathfinder FX
+44 (0)1743290955