Citigroup Inc. has begun delivering dividend payments from companies in the United States and the United Kingdom in the local currencies of shareholders in other countries, under an agreement with the Australian corporate services provider Computershare Ltd.
Computershare will offer the service to 14,000 corporations that use its stock transfer and registry services, in 17 countries.
Participating companies can ask whether their international shareholders want to opt in, and Citigroup will handle the currency exchange, processing, and delivery of the payments.
The service is up and running, paying dividends from companies in the United States and the United Kingdom, executives at Citi and Computershare said. Next year the two plan to extend the offering to more countries and to other corporate services, such as payments from corporate actions such as mergers and acquisitions.
Executives from the companies, which announced the agreement Dec. 12, said the service could provide a better foreign exchange rate for recipients, reduce their banking fees, and ease processing hassles.
"The vast majority of these payments are domestic, but a significant and growing number are international," said David Maya, the global head of business development for cash management in the Citigroup Corporate and Investment Banking unit. For companies that have shareholders abroad, he said, "this solves a problem that they knew existed but hadn't focused on."
The offering could mean additional foreign-exchange volume for Citi's WorldLink Payment Services, which is used by corporations, financial institutions, and governments to process international payments in over 135 currencies.
"This provides us access to flows that are not originated by our customers but are originated by the customers of our customers, or in this case our partner, to facilitate those flows," Mr. Maya said.
Paul Conn, the head of global capital markets at Computershare, said individual companies may have discrete arrangements with intermediaries to deliver cross-border payments in the recipient's preferred currency, but "I think this is the first time it has been rolled out on such a large scale."
Computershare, of Melbourne, has been expanding in the United States. In March it bought the registry and transfer-agent servicing business of SunTrust Banks Inc. of Atlanta, serving about 170 issuers. SunTrust became a Computershare registry client.
