With the impact of the Covid-19 pandemic, the world of eCommerce has seen an unprecedented expansion. Every day, more retailers are shifting to online sales, while entrepreneurs are finding their footing through eCommerce ventures.

Because international trading of goods and services is a part of most businesses’ daily operations, they must optimize how they receive and make payments in numerous currencies. When operating on a global scale, there are additional hurdles to cross, ranging from processing costs and FX volatility to consumer satisfaction and supplier relations, and this is why it is beneficial to use a multi-currency business account.

An increasing number of financial institutions now provide accounts that allow businesses and individuals to keep funds in different currencies. Some of these accounts are designed to allow businesses to send and receive payments in multiple currencies without having to convert each transaction or to create an account with a foreign bank.

What Is A Multi-currency Business Account?

A multi-currency business account, as the name implies, assists businesses in dealing with numerous currencies when you purchase and sell outside of your own country.

It is quite simple to open a multi-currency company account. After clearing a few normal security and verification checks, you may open an account, and today there is a large selection of payment service providers that will provide multi-currency services as part of an overall payment package.

What Are Its Benefits?

If you are already trading globally, or you want to expand outside your local market in order to capitalize on foreign opportunities, using a multi-currency business account can be extremely beneficial to your business. These advantages include:

Reduced transaction costs 

If you have several accounts in various countries, each bank may charge a fee to operate the account, and there may be hidden charges because the transaction chain is more complex and often less transparent. You may be charged extra costs if your payment is routed through a correspondent bank. A single multi-currency account allows you to keep all of the currencies that correspond to your client and supplier bases — and you just have to pay one account fee.

Managing foreign exchange 

A multi-currency account allows you to move money in the most cost-effective method, whether you’re buying or selling. Because a multi-currency account functions similarly to a holding account,  you may wait for a favourable exchange rate before changing from one currency to another. Furthermore, if you have enough cash, you may manage supplier payments by purchasing currency at a good rate and holding it in your account for future usage.

Speed

Turnaround speed is critical for cash flow. Cross-border payments are often slower than domestic payments; but, if you can deal in local currencies, transactions will not only be more efficient but also faster because you will be utilizing local payment networks.

Better customer experience

Being international means being adaptable. You may lose sales if prospective consumers are unable to pay in their preferred currency. Therefore it makes sense to have an online payments acceptance system that combines currencies and meets local expectations.

To Conclude

With so much uncertainty in the economy today, demand for multi-currency accounts have risen, particularly those offering US dollars and euros, as businesses want to protect themselves from exchange rate fluctuations.