‘Less is more’ doesn’t always apply. Sometimes, having more strings to your bow is really very useful, and when it comes to multi-currency accounts, this is certainly the case.
Multi-currency accounts can play a huge role in your business going global, but what exactly are they, how do they work, and does your business need one?
What are multi-currency accounts?
Financial service firms will often throw up some unusual names for products and services, but not this time. Multi-currency accounts are exactly what you expect.
They allow individuals and businesses to hold, receive and send funds in multiple currencies within the same account, giving them full visibility of their finances. They also come with built-in functionality to facilitate transfers between currencies.
It’s a much simpler and neater solution for those that use more than one currency. As opposed to using one central bank account, incurring high FX charges, or opening various bank accounts in foreign territories, which can be cumbersome, multi-currency accounts keep everything in one place while keeping costs low.
Does my business need a multi-currency account?
If you have a need to send, receive or hold multiple currencies, then it’s a no-brainer. Let’s say that you’re a software company which is expanding internationally. You want to accept subscription payments from new clients in Latin America and Asia. You also have a developer team that’s based in Romania which needs to be paid in their local currency.
Now, there’s nothing stopping you from using one central account for all of this. But you’re likely to be paying a hefty fee on every foreign transaction, reducing your profit margin and increasing your expenses.
And then there’s the issue of time. It may take days for international payments to clear, leaving you and your suppliers waiting on funds and making it challenging for your Ops and finance teams to have an accurate view of your financial situation.
Multi-currency accounts eliminate both of these obstacles. Your business can accept an unlimited number of payments in the local currency, completely avoiding an FX conversion fee. Then, if you want to transfer those funds between different currencies, you can access them at the wholesale rate.
Funds can then be sent on to your suppliers in their local currency. No high fees. No unnecessary wait times.
There are also efficiencies to be gained on the customer side. Let’s say you have customers in Switzerland, Germany and the UK. You can easily enough issue customers of those three countries a virtual IBAN in their local currency. However, this means that the onboarding process will have to be slightly different for each customer group.
And what if customers move around, changing the currency they want to use? These things are manageable, but become complete non-issues when every customer has the same multi-currency account. The experience is the same for them, but for your business, it’s simplifying operations and removing future headaches.
Any global business will tell you that expanding internationally is one of the most challenging aspects of growth. Having your business geared towards it as much as possible goes a long way in reducing unexpected bumps in the road.
How does it all work?
We can only speak for OpenPayd, but here’s how our multi-currency accounts work.
Every multi-currency account is issued with a single virtual IBAN. This means that you don’t need to remember different sets of details for each currency within your multi-currency account – all payments are sent to, and from, the same vIBAN.
Within that vIBAN, sit a number of wallets in different currencies. OpenPayd offers up to 12 currencies right now. When making a transfer out of your multi-currency account in GBP or EUR, the payment will be instant, using Faster Payments and SEPA Instant respectively. For payouts in other currencies, these will be sent via SWIFT.
From your dashboard you can see the balances of each currency in one comprehensive view.
At OpenPayd we have no limit to the number of multi-currency accounts you can open and we can issue hundreds of thousands in a day. For more information visit our dedicated page on multi-currency accounts where you can also book a call with our team.