IP firm user guide to Afex

In several recent posts I blogged about Afex.com, a provider of international wire transfer services.  By now we have migrated nearly all of our international wire transfer activity away from previous vendors and over to Afex.  The user documentation for Afex is, said charitably, extremely limited.  The documentation seems to assume that the reader is already an extremely experienced user of legacy wire transfer services, such that the reader only needs to learn a few things about Afex to be able to do all of the things that the reader already knew how to do with a legacy wire transfer service.  What’s more, the documentation does almost nothing to explain how you would actually use the system if you are an intellectual property firm.

If you already have service set up with some wire transfer service provider, it would be very tempting to stick with what you know and are familiar with.  But as I mentioned here and here, many of the legacy service providers really charge quite a lot, both in bank fees and in currency exchange rate fees, compared with what Afex charges.  So it might be smart to start using Afex.  The problem being that the documentation is so poor.

With this in mind, I have written a user guide that draws upon our experience using Afex.com to pay foreign IP firms and foreign IP offices (e.g. WIPO, KIPO) and using Afex.com as a way to receive bank wires from foreign IP firms.  You can see it here.  Please post comments and suggestions below.

4 Replies to “IP firm user guide to Afex”

  1. I have been following Carl’s research into AFEX, because, like many, I am keenly aware of the issues relating financial transactions with foreign law firms. Unlike Carl (at least I think unlike Carl), I have delegated the day to day financial transactions to another attorney, so my perspective may be a bit limited. However, I reviewed Carl’s “user guide” which he linked above, and responded privately to Carl with comments on the user guide. Carl, I think partially in response to my private comments, made the post so that I and others could provide those comments publicly for the benefit of all followers. What follows are the comments on the AFEX “user guide” that I made privately to Carl. The quotes below are from Carl’s AFEX “user guide.”
    “I sort of cannot figure out why anyone would ever want a value date that is anything other than the soonest possible date for the transaction to happen” – To manage cash flow.

    “The spot-forward screen permits you to…[perform] currency conversion. *** But this will not sting as much as it would with some service providers since (at least in our experience) the currency conversion premiums charged by Afex are strikingly less bad than those of many other service providers” – You have not posted how much AFEX takes on conversion, only differentials compared to other payment options. If you can immediately convert a currency from $ to B, and you can immediately thereafter convert B to $, then you will know the average spread AFEX takes for that binary set of currencies, at least for the amount converted. They (AFEX) might, for example, scale the spread based upon the amount converted, or take a flat percentage plus a fraction of the amount converted.

    3. AFEX – As you noted that “AFEX” is not a bank, but what exactly is AFEX? I for one like to know with whom I am dealing. So I provide the following information I retrieved in response to your post.

    The phrase “AFEX MONEY EXPRESS” is a live trademark, reg number 3044485, registered to “Associated Foreign Exchange, Inc. CORPORATION CALIFORNIA 16133 Ventura Boulevard, Suite 900 Encino CALIFORNIA 91436”
    The phrase “AFEXDIRECT” is a live trademark, reg number 3515871, registered to “Associated Foreign Exchange, Inc. CORPORATION CALIFORNIA 21045 Califa St. Woodland Hills CALIFORNIA 91367.”

    A 12/29/2006 merger document filed in CA indicates that “Associated Foreign Exchange, Inc.” was a wholly owned subsidiary of “Associated Foreign Exchange Holdings, Inc.” I assume that to still be the case.

    Several SI-200 form filings in California between 2006 and 2/2019 indicate that “Associated Foreign Exchange, Inc.” has CA corporation number C2864179; address of 2145 Califa Street, Woodland Hills, CA 91367; CEO named Jan ***; CEO named Richard ***.

    However, none of those corporate statement is signed. I wonder if someone on the list can comment on the propriety of filing an SI-200 (or the newer replacement in CA for that older form) without actually including a signature. In the USPTO, that would be a bad thing. But maybe not so in CA.

    Also note that I redacted last names of the corporate officers. However, anyone can download those forms from the CA corporation commission database and find the full names.

    I do not know if AFEX is subject to financial regulations and fiduciary duties imposed by statutory law. That causes me a bit of concern. I wonder if anyone on this list serve could comment on what, if any, fiduciary duties, and what government oversight, might exist for the AFEX corporate entities.

    1. Rick asks how much of a spread Afex takes on conversion. Just now I looked to see what it would cost in US dollars to purchase 2000 Polish zlotys. It turns out I would have to spend $526.88 just now with Afex to get PLN 2000. Then suppose I turn around and convert those Polish zlotys back to US dollars. It turns out I would get back $517.93. The spread is about 1.7%. Meaning that Afex would take about 0.85% one way and about 0.85% coming back.

      Rick, I’d be grateful if you could do the same with whatever service you use for your foreign bank wires, and see what the spread is with your service.

  2. Carl – My firm has been using the Western Union Global Pay service (WUGP) for currency purchases and payments in foreign currency. Today, 2000 Polish zlotys (PLN) would cost my firm 627.40 US dollars (USD) using WUGP. I cannot determine the amount of dollars WUGP would provide my firm for selling 2000 PLN today. However, my WUGP purchase of 2000 PLN for 627.40 USD from WUGP provides an exchange rate of 3.188 PLN/USD. Your purchase of 2000 PLN for 526.88 USD from AFEX provides an exchange rate of 3.796 PLN/USD.

    The difference in exchange rates is, to put it mildly, large. AFEX is providing 16% more PLNs per USD, than WUGP, as of today, (I must be in the wrong business!)

  3. Carl and Rick: Thanks very much for the guide and your comments thereto.

    I spoke with Afex today. One of their restrictions is that the other party to the Afex transaction (at least in an instant transfer) must have an established banking relationship in a location where an Afex location exists. There are a number of locations in Europe, for example, but fewer in other parts of the world. So, the Afex benefit is somewhat limited by that restriction.

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