How to Leverage Multi-Currency Accounts for Global Business Expansion

Sometimes the best way to expand your business is to go global, but if you have little experience in cross-border commerce, the prospect can seem daunting. Foreign exchange rates, conversion charges, cross-border payment processes – it seems like there’s a lot to grasp. All of this can be simplified by using multi-currency business accounts. 

Read on to learn how you can use them to reduce currency costs and finesse your cashflow to support your global business expansion.

What is a multi-currency account?

A multi-currency account is an account with a bank or fintech platform that allows a business to hold funds in multiple currencies. It enables you to receive and make payments in different currencies, and to hold money in those currencies or convert them when the time suits you. For example, if you get paid by clients in USD, you can hold the money in your multi-currency account and then use it to pay contractors who’ve invoiced you in USD, without ever incurring any conversion costs.

Who uses multi-currency accounts?

Any business, entrepreneur or freelancer who buys or sells in currencies other than their own local currency will find a multi-currency account useful. As well as businesses, individuals who have reasons for holding multiple currencies also find them useful – for example, frequent travelers and people who own property abroad.

What are the benefits of using multi-currency accounts?

When you want to extend your business into other countries, using a global payment solution such as Payoneer can leverage your FX dealings to your advantage.

Multi-currency business account benefits include:

• allowing your customers to pay in their own currency into your local receiving account, as if they were paying a local business using their preferred payment method
• Payoneer and other fintech payment platforms enable smart, secure business payments and tend to process payments faster than using traditional international bank transfers
• reduced FX fees and charges – you’re able to hold multiple currencies in one account, and you only need to convert when it’s convenient to do so
• using a payment platform like Payoneer means straightforward and transparent pricing for cross-border transactions, enabling you to forecast your FX costs more accurately
• by holding different currencies rather than exchanging each transaction, you can avoid volatility in the exchange rate market
• holding multiple currencies in your Payoneer account allows you to see at a glance how much cash you have – resulting in better cashflow management and reducing the need to juggle multiple accounts

Are there downsides to multi-currency accounts?

There are some challenges with using multi-currency accounts, but these can be managed – and the benefits of being able to expand your business globally far outweigh these issues:

look for a multi-currency account which can integrate with your accountancy and other financial software to avoid system compatibility issues – Payoneer integrates well with most marketplaces and accounting packages

you’ll need to follow exchange rates to know when it’s best to make conversions

you need to be compliant with the regulatory and tax regimes in the jurisdictions within which you operate – a payment platform like Payoneer is already compliant and enables your financial record keeping for tax reporting

doing business globally naturally comes with costs, but using a global ecommerce payment solution such as Payoneer means lower fees and transparent pricing

holding large sums of cash in multiple currencies may represent an opportunity cost, so good cashflow management is essential