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How It Works Step by Step

DFX is a fully outsourced internet platform that enables customers of a DFX client bank to make online foreign currency transactions through the client bank's website. DFX software provides the on-line communications between the bank, its customers and DFX's third-party currency vendors. Step by step, here's how it happens:

Initial Use and Registration/Enrollment

A bank client, using his or her password, logs onto the DFX client bank's website. Clicking on the "foreign exchange" link opens the DFX transaction choice page, which is "white labeled' to the bank's name and conforms to the bank's online graphic standards.

If the client is a first-time user, he or she is asked to enroll or register in order to be able to access foreign exchange services. The register/enroll link takes the user back into the bank's core system to an internal registration page that cannot be accessed by DFX or its third-party vendors.

Thus, the registration process provides a control point that permits the bank to make its own suitability decisions about the registering user.

When the registration process is complete, the bank generates a random ID number that links DFX transactions to specific customer accounts, insulating those accounts from data theft. While a bank customer's name and address become known to the third party-vendors via the DFX system for product delivery purposes, the customer's SSN/EIN and account numbers don't leave the bank's database and are never provided to DFX or its vendors.

Subsequent Ongoing Use

A bank client, using his or her password, logs onto the DFX client bank's website. Clicking on the "foreign exchange" link opens the DFX transaction choice page, which is 'white labeled' to the bank's name and conforms to the bank's online graphic standards.

The transaction page offers eight transaction choices: wire transfers/receipts, currency purchase/sale, travellers' checks purchase/sale, and foreign currency denominated check issuance/receipt. For currency purchasers, the system enables the bank client to view facsimiles of each currency available in a range of denominations.

The client chooses a transaction type, enters a transaction amount in either dollars or the desired currency. The system immediately provides a conversion rate and a transaction settlement amount that will be debited or credited to the client's account.

The rates displayed are set daily for currency products and travellers' checks andre-set several times intra-day for wire transfers and foreign currency-denominated checks; rates include the client bank's own fees, the money vendor rate and DFX fees.

The client then presses a "next" button which brings up a transaction review screen with submit, edit and cancel options

Once the submit command is entered, the transaction goes into the client bank's DFX back-office system, and the bank has full control over the approval process - be it manual or by means of straight through processing - before forwarding the order to the third-party vendor via DFX to be executed.

Once the transaction is completed, the customer is notified via email.

The bank debits or credits each DFX transaction to customer accounts as it does other electronic withdrawals and deposits.

The bank receives its fees directly each day when debiting its clients' accounts as transactions are booked. The bank then pays the third-party vendors the net settlement for the transaction, usually by crediting the vendor's ACH account.

Note that the bank takes no position in foreign currency or exchange, and it is the direct customer of the vendor. The bank sets - and can easily readjust - its own fee structure.

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