By Tom Halpin, Head of North America Global Payments Solutions, HSBC
In a world where capital can move across borders in seconds, it’s surprising how many U.S.-based companies are still navigating foreign exchange (FX) settlements that take two or more business days to complete. That’s not just a delay in dollars—but in decisions, partnerships, and growth.
For multinationals managing complex supply chains, overseas payrolls, or high-volume trading, FX settlement isn’t just a back-office function. It’s a real-time driver of liquidity and risk. And when settlement times stretch to 48 hours or more, the ripple effects can show up in disrupted operations, strained supplier relationships, and tighter working capital.
Despite a surge in digitization across finance, many companies are still tethered to outdated FX settlement cycles—often relying on fragmented networks of correspondent banks, manual approvals, or region-specific constraints. The result? Payments can get trapped in slow-moving processes, increasing the chance of errors and exposing businesses to shifting FX rates.
That’s more than an administrative issue. For CFOs and treasurers, settlement delays create genuine risk. When a company agrees to pay a supplier in euros, yen, or pounds, it needs certainty on when that payment will land—and at what cost. A two-day lag can mean missing out on favorable FX pricing, or misaligning with the timing of critical inventory delivery. For businesses operating on tight margins or fast-moving cycles, that can’t be ignored.
Take a mid-sized U.S. technology company with operations across Europe and Asia. Its treasury team was managing FX through multiple regional banks. Settlement often took 2–3 days, leaving cash temporarily inaccessible and making it harder to reconcile accounts across time zones. Treasury staff were spending hours each week coordinating payments, monitoring exchange rates, and responding to inquiries from frustrated suppliers wondering when their funds would arrive.
Those delays didn’t just impact internal efficiency—they affected the company’s ability to maintain favorable terms with overseas partners. Some suppliers started requesting prepayments or adding fees to compensate for late payments outside their control.
However, once the company streamlined its FX and payments infrastructure, it began settling most international payments on the same or next business day. The shift not only restored trust with suppliers but freed up treasury resources and improved forecasting. By gaining access to competitive real-time FX rates and minimizing intermediary costs, the company also reduced its overall FX-related expenses by 20 percent.
These kinds of improvements aren’t theoretical. Same-day or next-day FX settlement reduces the cash drag many corporates experience. Faster settlement helps treasurers lock in rates, avoid unfavorable swings, and align outgoing payments more precisely with incoming revenues or inventory schedules.
It also enables better liquidity management. When FX settlement aligns more closely with transaction execution, it reduces the gap between intention and outcome. That means fewer surprises, more accurate budgets, and fewer constraints on growth.
But not every organization has access to the technology and infrastructure needed to support faster settlement. Regional fragmentation, regulatory variations, and reliance on legacy platforms all contribute to the challenge.
Ultimately, faster FX settlement is not just a treasury upgrade—it’s a strategic imperative. Businesses with international footprints need to assess how well their current systems support their global ambitions. That includes asking:
· How much working capital is tied up in FX processing delays?
· What’s the cost of missed FX opportunities due to slow execution?
· Are supplier relationships being impacted by unpredictable payment timelines?
Addressing these questions won’t just improve operational efficiency—it will strengthen the foundations for long-term international growth.
As companies look to optimize every level of performance in an uncertain economic environment, one thing is clear: FX shouldn’t be the bottleneck. It should be the bridge.
