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Taming the complex world of international payments

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Taming the complex world of international payments

By: David Prendeville – Head of UK FX Services

When it comes to sport, the UK has its fair share of passionate fans. From football to cricket,gymnastics to swimming, many people enjoy attending games or watching tournaments. What they often forget though is that behind every sporting club, there is a business – often one with a huge international reach – and that business often faces many of the same challenges that other companies in the UK do as well.

The requirements of a once domestic sporting business have widened, calling for more sophisticated financial management to help meet rising customer ticket sales, to managing the payments for both the team’s players and staff when travelling overseas and delivering seamless and efficient digital transactions for their commercial partners and worldwide organisations.

Take America’s National Football League (NFL), for example. Not perhaps one of the first sports you’d think of in the UK but with NFL official figures reporting a UK fan base of over 13 million, including close to four million avid fans, UK customer love for the sport has begun to take a hold of many.

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A new cross-border dynamic

The Jacksonville Jaguars, a Florida-based NFL team are the only team in the US league to have a dual-residency in the UK, playing one game a season in London’s Wembley Stadium. Just recently, NFL UK Managing Director Alistair Kirkwood stated that the NFL is bring an academy to London with the aim of using American football to provide students with educational, professional sporting opportunities and the chance to play at NCAA college football in the United States.

This new cross-border dynamic for what was once a business focused in one region brings with it many challenges as well as opportunities. Indeed, any business that merchandises across multiple geographies will recognise the challenge; likewise those who have customers and employees indifferent time zones and regions.

How to manage payments and transactions from customers in multiple currencies. How to ensure that currency fluctuations don’t negatively impact your bottom line or lead to increased costs for customers. How to manage and track payments in an efficient way that doesn’t impact on wider resources. These are challenges that many businesses that transact globally face.

Making what can be a complex process simpler and more efficient is crucial so that businesses can focus on growth. And it’s that what’s at the heart of what organisations that are trading internationally. They want to grow, whether that’s economic growth, increased staff, new customers or just simply making their business strong and stable for the future.

For the Jaguars, once the team had invested in the UK sporting market, it needed support to help capitalise on the many opportunities. At Western Union Business Solutions, we were able to work with the Jaguars to offer them the insight and resources through bespoke tools and expert guidance that would help them navigate currency and payments challenges.

A long-standing history of working within the UK market has allowed Western Union Business Solutions to deliver tailored market insight during a time of UK political uncertainty, driving the efficiencies of the business behind the Jaguars across all platforms. As Jaguars Chief Financial Officer Kelly Flanagan, explains the partnership has offered “seamless, efficient and bespoke service to our international currency solutions”.

Focusing on what matters most – the game

Capitalising on the rising demands from the customer, the business behind the Jaguars are now able to offer their fans jam-packed London tourist packages when visiting their favourite team which,alongside your ticket to London’s iconic Wembley stadium also include hotel accommodation at The Mayfair, airfare and a River Thames dinner cruise.

But fundamentally establishing such a partnership has meant that the Jaguars have been able to focus on what matters most – the game – so much so that following the success of the first four games in the UK, the team’s owner Shahid Khan, announced an extended commitment to London until 2020.Something which will undoubtedly lead to the continual increase of their fanatical UK fan base.

Finance

Sunak warns of bill to be paid to tackle Britain’s ‘exposed’ finances – FT

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Sunak warns of bill to be paid to tackle Britain's 'exposed' finances - FT 1

(Reuters) – British finance minister Rishi Sunak will use the budget next week to level with the public over the “enormous strains” in the country’s finances, warning that a bill will have to be paid after further coronavirus support, according to an interview with the Financial Times.

Sunak told the newspaper there was an immediate need to spend more to protect jobs as the UK emerged from COVID-19, but warned that Britain’s finances were now “exposed.”

UK exposure to a rise of one percentage point across all interest rates was 25 billion pounds ($34.83 billion) a year to the government’s cost of servicing its debt, Sunak told FT.

“That (is) why I talk about leveling with people about the public finances (challenges) and our plans to address them,” he said.

The government has already spent more than 280 billion pounds in coronavirus relief and tax cuts this year, and his March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown.

He is also expected to announce a new mortgage scheme targeted at people with small deposits, the UK’s Treasury announced late on Friday.

Additionally, the government will also announce a new 100 million pound task force to crack-down on COVID-19 fraudsters exploiting government support schemes, it said.

(Reporting by Bhargav Acharya in Bengaluru; Editing by Leslie Adler and Cynthia Osterman)

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G20 promises no let-up in stimulus, sees tax deal by summer

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G20 promises no let-up in stimulus, sees tax deal by summer 2

By Gavin Jones and Jan Strupczewski

ROME/BRUSSELS (Reuters) – The world’s financial leaders agreed on Friday to maintain expansionary policies to help economies survive the effects of COVID-19, and committed to a more multilateral approach to the twin coronavirus and economic crises.

The Italian presidency of the G20 group of the world’s top economies said the gathering of finance chiefs had pledged to work more closely to accelerate a still fragile and uneven recovery.

“We agreed that any premature withdrawal of fiscal and monetary support should be avoided,” Daniele Franco, Italy’s finance minister, told a news conference after the videolinked meeting held by the G20 finance ministers and central bankers.

The United States is readying $1.9 trillion in fiscal stimulus and the European Union has already put together more than 3 trillion euros ($3.63 trillion) to keep its economies through lockdowns.

But despite the large sums, problems with the global rollout of vaccines and the emergence of new coronavirus variants mean the future path of the recovery remains uncertain.

The G20 is “committed to scaling up international coordination to tackle current global challenges by adopting a stronger multilateral approach and focusing on a set of core priorities,” the Italian presidency said in a statement.

The meeting was the first since Joe Biden – who pledged to rebuild U.S. cooperation in international bodies – U.S. president, and significant progress appeared to have been made on the thorny issue of taxation of multinational companies, particularly web giants like Google, Amazon and Facebook.

U.S. Treasury Secretary Janet Yellen told the G20 Washington had dropped the Trump administration’s proposal to let some companies opt out of new global digital tax rules, raising hopes for an agreement by summer.

“GIANT STEP FORWARD”

The move was hailed as a major breakthrough by Germany’s Finance Minister Olaf Scholz and his French counterpart Bruno Le Maire.

Scholz said Yellen told the G20 officials that Washington also planned to reform U.S. minimum tax regulations in line with an OECD proposal for a global effective minimum tax.

“This is a giant step forward,” Scholz said.

Italy’s Franco said the new U.S. stance should pave the way to an overarching deal on taxation of multinationals at a G20 meeting of finance chiefs in Venice in July.

The G20 also discussed how to help the world’s poorest countries, whose economies are being disproportionately hit by the crisis.

On this front there was broad support for boosting the capital of the International Monetary Fund to help it provide more loans, but no concrete numbers were proposed.

To give itself more firepower, the Fund proposed last year to increase its war chest by $500 billion in the IMF’s own currency called the Special Drawing Rights (SDR), but the idea was blocked by Trump.

“There was no discussion on specific amounts of SDRs,” Franco said, adding that the issue would be looked at again on the basis of a proposal prepared by the IMF for April.

While the IMF sees the U.S. economy returning to pre-crisis levels at the end of this year, it may take Europe until the middle of 2022 to reach that point.

The recovery is fragile elsewhere too. Factory activity in China grew at the slowest pace in five months in January, and in Japan fourth quarter growth slowed from the previous quarter.

Some countries had expressed hopes the G20 may extend a suspension of debt servicing costs for the poorest countries beyond June, but no decision was taken.

The issue will be discussed at the next meeting, Franco said.

(Additional reporting by Andrea Shalal in Washington Michael Nienaber in Berlin and Crispian Balmer in Rome; editing by John Stonestreet)

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Bank of England’s Haldane says inflation “tiger” is prowling

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Bank of England's Haldane says inflation "tiger" is prowling 3

By Andy Bruce and David Milliken

LONDON (Reuters) – Bank of England Chief Economist Andy Haldane warned on Friday that an inflationary “tiger” had woken up and could prove difficult to tame as the economy recovers from the COVID-19 pandemic, potentially requiring the BoE to take action.

In a clear break from other members of the Monetary Policy Committee (MPC) who are more relaxed about the outlook for consumer prices, Haldane called inflation a “tiger (that) has been stirred by the extraordinary events and policy actions of the past 12 months”.

“People are right to caution about the risks of central banks acting too conservatively by tightening policy prematurely,” Haldane said in a speech published online. “But, for me, the greater risk at present is of central bank complacency allowing the inflationary (big) cat out of the bag.”

Haldane’s comments prompted British government bond prices to fall to their lowest level in almost a year and sterling to rise as he warned that investors may not be adequately positioned for the risk of higher inflation or BoE rates.

“There is a tangible risk inflation proves more difficult to tame, requiring monetary policymakers to act more assertively than is currently priced into financial markets,” Haldane said.

He pointed to the BoE’s latest estimate of slack in Britain’s economy, which was much smaller and likely to be less persistent than after the 2008 financial crisis, leaving less room for the economy to grow before generating price pressures.

Haldane also cited a glut of savings built by businesses and households during the pandemic that could be unleashed in the form of higher spending, as well as the government’s extensive fiscal response to the pandemic and other factors.

Disinflationary forces could return if risks from COVID-19 or other sources proved more persistent than expected, he said.

But in Haldane’s judgement, inflation risked overshooting the BoE’s 2% target for a sustained period – in contrast to its official forecasts published early this month that showed only a very small overshoot in 2022 and early 2023.

Haldane’s comments put him at the most hawkish end among the nine members of the MPC.

Deputy Governor Dave Ramsden on Friday said risks to UK inflation were broadly balanced.

“I see inflation expectations – whatever measure you look at – well anchored,” Ramsden said following a speech given online, echoing comments from fellow deputy governor Ben Broadbent on Wednesday.

(Editing by Larry King and John Stonestreet)

 

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