The borders of the countries are simply displayed on maps now. Aside from the globalization of financial transactions, financial institutions have come to realize that they can no longer limit their services.
By its very nature, a multi-currency business account is what will help you to handle different currencies when you trade outside your domestic market. For instance, you can keep dollars, euros, and pounds all in one place. If you have an account that can manage only one currency, your profits and business performance may be dented by high fees and transaction complexities.
In that regard, here are five direct benefits of having a multi-currency account for your business:
- Reduce transaction costs
Each bank may charge a fee for operating separate business accounts in different countries, and because the transaction chain is complex and often less transparent, there may be hidden fees.
Additional fees may apply if your payment is processed through a correspondent bank, which is the global banking system that moves money around the world. Having a multi-currency account enables you to maintain all the currencies that match your customer base and supplier base and to pay just one account fee.
- Manage foreign exchange
Foreign exchange (also referred to as forex or FX) is another cost to look out for. You can manage forex volatility with a multi-currency business account. Assuming you have only one account that only receives foreign currencies when converted into British pounds, then you may lose money in the case of an unfavourable exchange rate.
In the event of either a purchase or a sale, a multicurrency account provides the most cost-effective way to move money. However, unless you have a multi-currency account, do not use major marketplace platforms requiring you to convert money through them. There is a possibility that you might find yourself paying far more than the market rate.
- Convenience and simplicity
Business success and failure are often determined by operational efficiency. Especially when it comes to payments, which are the lifeblood of every business, cash flow and control are critical – all the more so when you operate internationally.
The administration of a multi-currency account is much easier since everything is in one place and streamlined. Managing monthly accounting is less complex since you do not need to match and reconcile invoices and receipts across currencies, and you are not subject to fluctuations in exchange rates. Nor will you have to juggle different accounts and different banks across multiple jurisdictions.
Fast turn-around speeds are important for cash flow. Cross-border payments are often slower than domestic payments, but if you can accept local currencies, transactions will not only be more efficient, they’ll also be a lot faster since local payment networks are readily available. You can also access your multi-currency account from anywhere using an app or online account.
- Better customer experience
You’re more likely to get repeat business if your customers are happy with your payment method. You may lose sales altogether if prospective customers cannot pay in their preferred currencies.
Having a system that accepts payments online with multiple currencies and meets local expectations is a smart idea. If you’re trading in Europe, deal in euros. Accept dollars as the preferred payment method if people want to pay in dollars. The key to being international is versatility.
Opening a multi-currency account is part of choosing the right payment strategy for your business. There are several payment service providers today who will offer you multi-currency facilities as part of an overall pay package after you pass a few standard security and verification checks. This means you won’t need to contact a bank directly.