Dubai, UAE – Hubpay, a leading fintech company specializing in digital solutions for foreign exchange, has announced the launch of the UAE’s first fully automated hedging platform. This cutting-edge service aims to provide small and medium-sized enterprises (SMEs) with an essential tool to manage currency fluctuations, helping them stabilize their cash flows and navigate the challenges of operating in global markets.
With the UAE’s foreign exchange market exceeding $1 trillion, driven by the country’s status as a global trading hub, Hubpay’s latest offering is a timely response to the rising demand for currency risk management solutions. To date, the company has processed over $2.2 billion worth of transactions and is now introducing its new Futures service, a 24/5 automated platform that covers all deliverable currencies, enabling businesses to mitigate financial risks in a volatile market.
Addressing Cash Flow Challenges for SMEs
Managing cash flow is one of the most pressing challenges for SMEs, with nearly 60% of businesses reporting cash flow issues during their operations. Hubpay’s platform offers a solution through flexible forward contracts, allowing SMEs to lock in future exchange rates with a deposit as low as 5% of the total notional value. This feature provides businesses with predictability in their foreign exchange transactions and helps them safeguard against sudden currency fluctuations, ensuring stability in their day-to-day operations.
“Many SMEs face significant risks due to currency volatility, which can severely impact their profitability,” said Kevin Kelty, CEO and Founder of Hubpay. “With our flexible forwards service, businesses can hedge their exposure and maintain stable cash flows, avoiding unexpected spikes in exchange rates.”
A Real-World Example: UAE-Japan Trade
One of the key trading partners of the UAE is Japan, with trade between the two nations exceeding $20 billion over the last 10 months. However, currency volatility remains a challenge for companies engaging in this trade, as the Japanese yen fluctuated by 12% during the same period.
In a real-world scenario, a UAE-based SME placed an order with a Japanese supplier in July, planning to make the payment in October. During that period, the exchange rate moved 7.8% in favor of the yen, resulting in an unexpected increase in the cost of goods. What was initially budgeted at $500,000 grew by an additional $39,000 due to the unfavorable currency movement, squeezing the company’s profit margins.
“Had the company used our hedging service, it could have locked in the exchange rate back in July, protecting itself from this volatility and maintaining its original budget,” Kelty explained. “This would have helped the company better manage its cash flow and secure its profitability amid market fluctuations.”
A Game-Changer for SMEs
Hubpay’s fully automated hedging platform is designed to give SMEs a competitive edge in the global market by reducing the uncertainties associated with foreign exchange. The platform operates 24 hours a day, five days a week, ensuring continuous coverage and support for businesses dealing with international currencies. By leveraging Hubpay’s flexible forward contracts, SMEs can allocate more working capital toward growth and operational needs, rather than worrying about sudden currency shifts.
With this new offering, Hubpay is positioning itself as a key player in the financial landscape, providing innovative solutions to help SMEs thrive in an increasingly complex global economy.
