Frequently Asked Questions

PeopleHedge provides peace of mind to our qualified customers by allowing them to lock-in a foreign currency exchange rate (FOREX) into the future. As an example, you are in the United States, sell a product in Europe, and accept Euros for payment. Unfortunately for you the payment is 30 days after the delivery. The exchange rate can really affect the profitability of your sale, particularly given today's volatile markets. If you have a loan payment to a bank in Canada, the exchange rate changes your payment, every month. If you have to pay workers that are stationed overseas, the exchange rate changes how much compensation your employees receive, and thusly, their happiness.

For a small upfront fee, PeopleHedge will not only guarantee a currency exchange rate, but if the rate moves in your favor, you get to keep the better rate. Here is an example:

You are a business located in the United States and you sell $10,000 (USD) worth of widgets to a company in Canada. The terms of the deal are payment in Canadian dollars (CAD) 30 days after delivery. At the time of the deal the CAD/USD exchange rate was 1:1, so 10,000 CAD = $10,000. Unless you are time traveler, you cannot know what the exchange rate will be in 30 days. In fact, the currency is so volatile that from June 2011 to June 2012 there have been seven 30 day periods where the CAD/USD exchange rate has moved more than 5%, including one where it moved over 8%. In this environment, your profits can be wiped out by currency fluctuations! Enter PeopleHedge: for around 1.5% we can lock-in your exchange rate for 30 days. Let us see what happens if the exchange rate moves 5% in either direction:

Exchange rate moves 5% in your favor:

This means that the exchange rate is now 1.05:1 CAD/USD, so when you exchange your 10,000 CAD you receive $10,500. In this case, you do not receive a payout from PeopleHedge, but you do get to keep your better exchange rate!

Exchange rate moves 5% against you:

This means that the exchange rate is now .95:1 CAD/USD, so when you exchange your 10,000 CAD, you receive $9,500. Normally, that would be terrible, but since you have a contract with PeopleHedge, we pay you $500. This payment is made automatically with no paperwork to file or claims to make.

Non-U.S. Customers:

We are expanding into other markets including Canada, the U.K. and Europe and are reviewing legal requirements for customers in each locale. Please contact us if you are interested in our service outside of the U.S.

U.S. Customers:

Only Eligible Contract Participants (ECP) based in the United States can participate via our website. That sounds technical, and it is. Several types of persons and entities qualify as ECPs, including (among other things) a business that has a net worth over $1 million and is hedging (protecting against) a currency risk associated with its business.

Some examples of businesses that can take advantage of our service:

  1. Import/Export Companies.

    If you have payables or receivables in a foreign currency, our product is built for you. Now there is no need to "guesstimate" what your monthly profits will be. Use our product and gain certainty. Even if you only transact in dollars, you are at risk of your suppliers raising their prices or your buyers demanding that you lower yours. Gain certainty with PeopleHedge.

  2. Universities with International Students or Study Abroad Programs.

    Why let exchange rates dissuade top international students from attending your university? Also, keep the actual cost of sending students abroad within your budget.

  3. Companies with International Payroll.

    Do you have employees on international assignments? If you are paying them in their home currency they are guaranteed to be unhappy once the exchange rate moves against them. Unhappy workers are unproductive workers. Lock-in your payroll and keep your employees smiling.

  4. Not-for-Profit Institutions.

    Collecting dollars but changing them into another currency to fulfill your mission? Why let exchange rates decrease the value of donations? PeopleHedge can protect your mission and add value for donors.

Interested in trying our product? Contact us and we will set up an account.

We currently only handle transactions from or to the U.S. Dollar. We are working to increase our offerings and plan to offer more choices in the future. Please let us know if you have a currency requirement for your business where we could help.

While our product may resemble insurance, we are certainly not an insurance company. Insurance companies use mathematical models to determine the probability of an event, and then charge a fee to match the risk of the event actually occurring. We do not predict, nor do we care, which direction exchange rates move. We use existing, exchange traded, transparent products that have worked very well since they were invented in the 1970's. The only difference is that we make it easy for our customers and allow for much smaller amounts to be protected. This is commonly called "hedging" a risk. In our case, we are hedging currency risk.

Absolutely not! Think of our product as purchasing a minimum exchange rate in the future. The small upfront fee (see next question) is the only transaction from your side. On the due date that you select, we automatically pay if the exchange rate moved against you.

The fee is typically between 1 and 5% of the amount you are protecting. If you are protecting $1,000, it will usually be between $10 and $50. The fee varies based on how volatile the currency is and how far into the future you want to protect your transaction. Try our demonstration product here .

We are not in the business of exchanging currencies, so it is up to you to make the exchange. This offers many advantages to our customers:

a. What if the deal falls through and there is no exchange in the future?

This has no effect on our contract. If on the due date the exchange rate has moved against you, we pay automatically, no matter what happens to the actual transaction.

b. What if I find a better exchange rate before the due date?

We hope that you can make a favorable exchange at any time; before or after the due date. It does not matter to us. On the due date, if the exchange rate has moved against you, we pay automatically.

c. What if I do not make the currency exchange on the due date?

We recommend that you make the exchange at the specified time on the due date. This will make our payout equal to what you are expecting. If you deviate from this time, you are adding currency risk. There are definitely situations where you should not wait, such as when you have a superior exchange rate and the means to conduct the exchange prior to the due date. In the case where we are going to make at payout to you, if you do not make the exchange at the specified time, the currency market can move further against you, causing further unexpected loss.

d. Can I shop around my exchange rate?

Absolutely! We encourage you to contact banks and other providers to get the best rate on the day you do the exchange.

e. You mention I can shop around for rates with different banks on the day of the exchange. What determines the rate that PeopleHedge locks in for me?

On the day you lock-in, a bank provides an actionable quote for the exchange rate. On the due date, at 3PM ET, the bank provides another actionable quote for the exchanges rate. If the second rate is worse than the first one, we pay you the difference. If it is in your favor, you keep the better rate, and there is no payout. For the actual exchange you can choose to use our bank's quote or, if you shop around, you may receive a better quote.

When a contact is executed, it cannot be changed. However, as you approach the due date, you can purchase a new contract for that shorter period of time. If rates have moved in your favor, you get to lock-in an even better rate! If rates have moved against you, as long as you create a new contract when the old one expires, you will be protected.

Yes, the minimum protection amount is $1,000 and the minimum time is 1 day. The system will not allow you to select a due date on a weekend or banking holiday.

Currently, our maximum transaction amount is $200,000. However, we do expect to be able to do larger amounts sometime in the near future.

For due date, the system is designed to effectively protect transactions 1 to 90 days into the future. After that time range, the cost increases more significantly. We allow up to one year of protection and we are working on tools to protect transactions further into the future at competitive prices.

This is a common problem for businesses that are paid in another currency but immediately convert the payment to dollars. Your terms might dictate a 30-day payment window, during which your client has the right to pay at any time. In this case, you could purchase our product for 30 days, and when the customer pays, you can activate our product to payout on that specific date of purchase. Depending on how much time is left on your contract, we will generally offer you a rebate credit for use on your next contract with PeopleHedge.