In today’s world, businesses that transcend national boundaries and operate internationally are common. If you have to accept, receive and hold international payments; it becomes crucial for your business to have multiple bank accounts for different currencies. However, this may be an added burden on businesses, and hence, most banks now offer a multi-currency business account.
Multi-Currency accounts are bank accounts that allow you to send and receive payments in various currencies. It is a global banking solution whereby multi-currency accounts serve the purpose of having multiple bank accounts but with the IBAN of one, single account. If your company is concerned with the pain of opening and maintaining overseas banking relationships, having a multi-currency account could be quite beneficial to you. Some of the significant benefits of opening a multi-currency account are as follows.
1)Payment convenience
If your business operates internationally or if you are thinking of tapping into an overseas market, switching to a multicurrency account is a convenient option for you. This type of account offers an integrated payment solution, allowing sending, receiving, and storing several different currencies into a single account and thus, saving you the nuisance of managing different accounts.
2) Reduction in transaction costs
International transactions can incur substantial costs especially if those transactions are frequent i.e. foreign exchange commission charged by your bank for currency conversions. You may also be charged an additional fee by the correspondent banks. Opening a multi-currency account will help reduce these costs as there is no need for currency conversion and therefore, no foreign exchange commission. Additionally, making transactions via a single account also helps reduce the costs involved.
3)Enhanced business relationships
Using a multi-currency account is likely to strengthen your company’s relationship with your customers as well as your suppliers. Using currencies local to them can enhance your overall conversion rates as well as building trust and loyalty within the local customer base.
4)Enhanced efficiency
Managing multiple bank accounts for multiple currencies is a time-consuming ordeal; especially during the end of the month accounting period. Using a multi-currency account allows for less time being spent on reconciliation and this, in turn, increases your business’ efficiency.
5)Manage foreign exchange
Exchange rates are prone to continuous fluctuations, which may negatively impact your international operations if you use a single currency. Unfavourable exchange rates of a currency could potentially incur a loss for the business. Having a multi-currency account allows companies to spread the risk, i.e., using another currency with favourable exchange rates.
Conclusion
If your business handles international transactions or if you are looking to expand your business beyond national borders, opening a multi-currency account can be beneficial to you in numerous ways; it is convenient for you as well as your customers and suppliers, it helps reduce overhead costs and enhances your business productivity.
